Get Ahead Of Merit Season And New Pay Transparency Laws
Timing matters more than most comp teams give it credit for. Run a pay equity audit before merit cycles kick off, and you catch problems while they’re still fixable. Run it after, and any gaps that existed are now baked into next year’s raises, compounding instead of closing.
Many organizations conduct pay equity audits annually, typically scheduling them ahead of major compensation events like merit cycles, or folding them into broader restructuring work. If your audit hasn’t happened yet this year, the window to do it before letters go out is closing. Running that audit doesn’t have to mean rebuilding a spreadsheet from zero. SecureSheet makes it easy to bring your compensation data current whenever you’re ready to run an audit, so it’s a matter of updating and analyzing, not rebuilding a spreadsheet from scratch.
Why Pay Transparency Makes This Non-Negotiable Now
This isn’t just good practice anymore. It’s increasingly a legal requirement. More than a dozen states, including California, New York, and Illinois, now require salary range disclosure in job postings, and more jurisdictions are adding transparency requirements during hiring every year.
That shift changes the stakes of a pay equity analysis. When salary ranges are public, any inconsistency between what you’re advertising and what current employees in similar roles are earning becomes visible to candidates, to employees, and potentially to regulators. Staying ahead of pay transparency laws isn’t a compliance checkbox anymore. It’s a direct input into how defensible your pay structure is. A thorough compensation analysis is what connects the advertised range to what your current workforce is actually earning; without it, the gap is invisible until someone else finds it. SecureSheet’s reporting and analytic tools make it easy to compare salary ranges to current pay date, review compa ratios, and identify outliers.
The Remote-Work Pay Equity Blind Spot
Remote and hybrid work have introduced another variable into compensation decisions: location.
Some organizations use geographic pay zones, while others maintain national salary ranges for remote positions. Still others adjust compensation when employees move between locations or change their work arrangements.
Each approach can be valid, but inconsistencies can create problems.
For example, two employees performing substantially similar work may receive different compensation because they were hired at different times, negotiated under different market conditions, or were placed into different geographic pay structures. Over time, those differences can become difficult to explain unless the organization maintains clear compensation policies and documentation. SecureSheet helps identify these scenarios through robust reporting tools and detailed data audit trails.
7-Point Pay Equity Audit Checklist
- Pull current pay data by role/level/location. Start with clean, current data, not last cycle’s export. SecureSheet makes it simple to import updated role, level, and location data whenever you’re ready to run an audit.
- Segment by protected class + remote/on-site status. Don’t stop at demographics; work arrangement matters too.
- Run regression or cohort analysis for unexplained gaps. Look for differentials that persist after controlling for role, tenure, and performance. SecureSheet’s analysis tool flags unexplained differentials, without needing a statistician on staff.
- Flag outliers before merit letters go out. This is the entire point of timing the audit pre-cycle; outliers found after the fact are much harder to fix quietly.
- Document rationale for any pay differentials. Every gap that survives analysis needs a defensible reason on record.
- Loop in legal/compliance review, especially now, with pay transparency laws expanding state by state; legal should see the results before anything is finalized.
- Set a continuous-monitoring cadence (not just annual). A once-a-year snapshot misses everything that happens in between.
From Annual Audit to Continuous Monitoring
A once-a-year audit tells you where things stood on the day you ran it. It doesn’t catch the gap that opens up three months later when someone gets promoted into a role without a corresponding adjustment, or when a new hire comes in above the range of existing team members.
Modern compensation analysis tools can monitor pay equity continuously as employees join, change roles, get promoted, or have pay adjusted instead of waiting for the next scheduled audit to catch it. That shift from periodic to continuous monitoring meaningfully reduces legal and reputational risk, and it’s where SecureSheet fits in: rather than starting a pay equity analysis from a static spreadsheet each year, you can update your data anytime to reflect org changes as they happen, rather than waiting for the next scheduled audit.
FAQs on Pay Equity Audits & Pay Transparency
What is a pay equity audit?
A pay equity audit is a systematic review of compensation data usually segmented by role, level, location, and protected class to identify unexplained pay differences between employees doing substantially similar work.
How often should a company run a pay equity analysis?
Most organizations run a full pay equity analysis annually, timed to happen before merit increase cycles. Given how fast pay transparency requirements are expanding, many are shifting toward continuous monitoring rather than a single annual snapshot.
Which states require pay transparency in job postings?
More than a dozen states, including California, New York, and Illinois, currently require salary range disclosure in job postings, with additional states and cities adding requirements regularly.
What’s the difference between a pay equity audit and a compensation analysis?
A compensation analysis is the broader review of how pay is structured against market data and internal ranges. A pay equity audit is a more targeted version of that analysis, specifically looking for unexplained gaps tied to protected class or other non-performance factors.
What happens if a pay equity audit finds unexplained gaps?
Any gap that can’t be explained by role, tenure, performance, or another legitimate factor should be documented, reviewed by legal/compliance, and corrected, ideally, before it’s compounded by another merit cycle.
