As organizations expand geographically and embrace a more diverse workforce, it is essential to navigate the intricate and constantly evolving landscape of pay equity compliance. The two pillars in this area are pay discrimination statutes, both state and federal, and pay transparency requirements, which also can be at the county or even city level.  

Given the multitude of regulations that an employer is subject to and the nuances in statutory language that can add compliance complexity, addressing pay equity compliance can be a challenge for HR and legal executives. The stakes are only getting higher as regulators and the plaintiff’s bar leverage pay transparency rules to investigate the adherence to pay discrimination laws. Beyond the cost to litigate, the impact of a pay compliance failure on a company’s employer brand can linger for years. However, by employing appropriate resources and methodologies, VC-backed companies can safeguard their legal interests and provide fair treatment to their employees. 

The Growing Complexity of Pay Equity Compliance

Pay discrimination and pay transparency laws, collectively referred to as pay equity compliance, have expanded, which has turned the simple act of posting a job description and offering employment into a highly regulated activity. States can establish protected classes of individuals differently and set their own scope of geographic tests to compare protected class pay. For example, some laws require employers to look at employee pay within a county and others consider the entire state.  

To effectively address the challenges posed by pay equity compliance, VC-backed companies should consider implementing an integrated data management framework that streamlines the process of gathering, organizing, and analyzing company data. This should include consolidating data from various sources, such as HR, payroll, equity admin, and other systems to create a centralized repository of employee and compensation information that serves as the foundation for analytics and informed decision making. 

Along with a robust data management system, employers also should prioritize developing a clear and actionable reporting framework that allows them to scrutinize their compensation structures, identify potential inequities, and track progress toward pay equity goals. This includes generating regular reports that highlight any discrepancies across different demographics, roles, and geographical locations, as well as offering insights into the root causes of these disparities, enabling organizations to take targeted steps to address and rectify pay gaps.  

To ensure pay equity compliance initiatives are effective in driving meaningful change, organizations need to develop and implement pragmatic execution strategies that align with their broader business objectives. This begins with having a well thought out compensation philosophy that results in a rigorous job architecture built on levels, pay ranges, benchmarks and well-defined job descriptions. With that in place, pay practices become principle-based rather than random, and then change management can be driven through training and development programs, revamping performance management processes, or even rethinking how compensation and rewards are structured and distributed across the workforce.  

How Sequoia Helps Employers with Pay Equity  

Sequoia’s Comp OS™ integrates with existing HR systems to unify employee data, provide real-time analytics, and help ensure pay compliance. Comp OS enables an efficient and effective approach to compensation management, rather than using disconnected systems and spreadsheets. HR, legal, and finance teams can work in real time and execute their strategies, focusing on pay transparency and regulatory compliance. With comprehensive analytics tools, HR and legal teams can quickly identify key indicators, such as pay gaps by gender, race, and age, to make data-driven decisions in pursuit of pay equity. Comp OS also supports tailored pay ranges based on industry benchmarks and company-specific factors for competitive and compliant compensation structures. By leveraging these features, VC-backed companies can take steps towards both fostering a fair, inclusive work environment for all employees and protecting the company from liability and reputational damage. 

If you’re a current Sequoia client, you have access to a free trial of Comp OS from now until May 31, 2024. To learn more, visit If you are not a Sequoia client and would like to learn more about what Sequoia can offer your organization, contact us today

Stephen Kim — As the Chief Legal & Administrative Officer, Steve is responsible for operational excellence in the functions that both safeguard our business operations and ensure that the company has the resources necessary to support our clients and their growth. In this role, Steve works with team members in Legal, Talent, Human Resources, Security and IT, and Facilities.