As Executive Orders reshape the U.S. regulatory landscape, Total Rewards and Legal leaders are asking: What’s the impact on pay equity, and how should we respond?
In our latest webinar, Ask Us Anything: Understanding the Impact of the U.S. Executive Orders on Pay Equity, we broke down what’s changed, what hasn’t, and how to move forward with clarity while staying in compliance.
The discussion featured a panel of Syndio experts with decades of experience guiding organizations through pay equity and compliance challenges:
- Katie Bardaro, Chief Customer Officer, is a leading expert on the intersection of pay equity, data analytics, and labor economics.
- Christine Hendrickson, VP of Strategic Initiatives, brings her deep experience in employment law to help multinational employers navigate fast-changing pay equity, transparency, and reporting laws.
- Rob Porcarelli, Chief Strategy & Legal Officer, previously served as Assistant General Counsel at Starbucks, where he led legal teams on global labor, employment, and EEO issues.
The panel shared timely, actionable guidance to help you stay on top of the latest changes. Below, we’ve rounded up the key takeaways and answers to your top questions from the webinar.
Key takeaways on how recent Executive Orders impact pay equity
1. Pay equity is not the focus of “illegal DEI”.
The onslaught of executive orders came so quickly that leaders’ first reaction was to pause and ask what “illegal DEI” really includes. While the term illegal DEI remains undefined, the Administration is focused on hiring and promotion decisions based on race or gender. Pay equity — or pay fairness for all races and genders — is not the focus of illegal DEI claims.
2. Pay disparities are still unlawful.
Despite the recent Executive Orders, the laws that prohibit discrimination around pay, including Title VII, the Equal Pay Act, and state-level regulations, are still in effect.
Companies pulling back on pay equity and pay fairness efforts may be exposing themselves to greater risk. As Rob Porcarelli, Syndio’s Chief Strategy & Legal Officer, put it: “Pay equity is quintessentially anti-discrimination.”
In a live poll, 82% of webinar attendees said their organizations are staying the course on pay equity and another 13% are leaning in further.
3. A bidirectional approach to pay equity is best practice.
According to federal and state laws, pay must be equitable for all genders and races. Unlawful bias can impact anyone and any group. So if companies find a disparity impacting groups that are typically thought to have an advantage, it is nevertheless unlawful.
Analysis of Syndio’s proprietary data confirms that disparities are not one-directional:
- In 85% of gender pay comparisons, there is no significant difference between groups. However, when disparities do emerge, men are disadvantaged one in five times.
- In 84% of racial pay comparisons, there is no significant difference between groups. However, in 9% of cases with meaningful differences, white employees earn less than their peers — versus 7% when they earn more.
Your top questions about pay equity, answered
Do we still need to run pay equity analyses in light of the recent Executive Orders?
Yes — and if anything, organizations should lean in further to avoid risk. While the Executive Orders have created some uncertainty, they have not changed federal or state anti-discrimination laws like Title VII or the Equal Pay Act. Companies still have a legal obligation to ensure their pay practices are free from bias based on race, gender, and other protected characteristics.
Rob emphasized that pulling back on pay equity efforts could be a costly mistake: “Companies would be pulling back on all the behavior and activities that would be front and center if you were sued — and that would be part of your defense.”
He noted that many of the largest settlements in recent years have come from private litigation, not federal enforcement. Maintaining robust, bidirectional pay equity practices gives organizations a defensible position if challenged.
How have the recent Executive Orders changed requirements for federal contractors?
One of the biggest changes is that the Executive Orders revoked key provisions of Executive Order 11246, which previously required federal contractors to prepare Affirmative Action Plans (AAPs), conduct annual pay equity audits as part of affirmative action obligations, and certify compliance with non-discrimination requirements. Auditors have been told to “stand down.”
However, AAPs for veterans and individuals with disabilities have been maintained.
Should we still be doing AAP-style pay equity analyses?
There is nothing that prevents organizations from continuing to conduct analyses using Affirmative Action Plan (AAP) frameworks (i.e., by establishment and using similar pay analysis groups), especially if that’s how they’ve structured their internal reporting. However, many are transitioning to more flexible approaches that align with how they manage compensation.
Christine Hendrickson, Syndio’s VP of Strategic Initiatives, explained that while AAP-style analyses typically group employees by establishment (physical location), most organizations today are structured functionally: “Very few organizations are looking to align compensation establishment by establishment anymore. So in light of the changes to the OFCCP, we’re seeing a shift toward groupings that better align to how the workforce is managed, which is often by function.”
Are companies changing the way they talk about pay equity inside and outside the company?
Yes. Syndio’s Chief Customer Officer Katie Bardaro explained that, in response to the uncertainty created by the Executive Orders, some organizations are reevaluating how they talk about methodology and results in both internal and external communications
The work itself continues, but the language may be evolving, such as using terms like “pay fairness,” “pay audits,” or “pay consistency” to describe their efforts.
Does analyzing pay by race and gender increase legal risk?
No. In fact, failing to monitor and address disparities may increase risk. Organizations are still required to close any unlawful pay disparities impacting any race or gender, and pay equity analyses are a powerful tool for identifying and correcting potential problems before they become legal liabilities.
As Christine explained, “If you’re running your analyses in a way that corrects for all groups, you are reducing risk — not increasing it.”
Can we be targeted for analyzing hiring and promotion by race and gender?
There is currently no indication that companies will be investigated simply for conducting these types of analyses. In fact, doing so can demonstrate proactive compliance because “you still have an obligation not to hire or promote based on race or gender,” said Rob.
Running pay equity analyses ensures that a company’s pay policies and practices are not unintentionally disfavoring one group or another. The key is to use these analyses as part of broader, legally defensible compliance practices — not selective remediation.
How are companies handling pay disparities when they impact white men?
Best practice is to remediate pay gaps regardless of which group is impacted. A live poll found that this approach is consistent with how the majority of employers are approaching their pay equity analyses; they are making adjustments if any groups are impacted.
“Title VII doesn’t make an exception,” said Rob. “It protects categories — not certain people — and everyone is in those categories, including white men.”
Do the Executive Orders apply to employees based outside the U.S.?
No. The Executive Orders apply only to U.S.-based employees and entities. “To the extent that you’re a federal contractor doing work with the U.S. government, and you have employees based in the U.S., they are covered,” noted Christine. “Employees located outside the U.S. would not be in scope.”
How should we prepare for ongoing legal and regulatory uncertainty?
Litigation is likely to increase, and the majority of pay equity enforcement is happening through private lawsuits, not federal agencies. The best defense is a proactive, data-driven approach.
The panelists recommended that you continue to analyze pay from all angles — for equity and consistency and even looking at how under-leveling impacts pay — and take action when you uncover issues. It’s also critical to choose partners with a global purview and pay equity technology that helps you keep a pulse on where you stand and stay agile as circumstances change.
Christine pointed to recent settlements, including a $28 million agreement from a top tech company: “We’re continuing to see big-dollar settlements. Moving back or radically changing direction on pay equity opens you up to greater risk.”
Rob also highlighted the rise of under-leveling cases, where employees may be paid fairly within levels, but systematically assigned to lower levels based on race or gender. “You might have perfect pay equity by level, but if employees are funneled to lower levels based on identity, that’s still a problem,” he explained.
Pay equity remains a priority
With the Executive Orders and evolving legal dynamics, the risks of pay inequities, especially from private litigation, remain serious. As state-level transparency laws expand, global pay equity and pay gap reporting requirements grow, and employee expectations rise, the cost of inaction is too high.
Rob recommends that organizations navigating this landscape continue and deepen their pay equity work: “Lean in. Do the right thing. And make sure your practices are defensible.”
Learn how Syndio can help
Syndio’s solutions help you identify and address disparities no matter who they impact, supporting a lawful, bidirectional approach to achieving and sustaining pay equity.
The information provided herein does not, and is not intended to, constitute legal advice. All information, content, and materials are provided for general informational purposes only. The links to third-party or government websites are offered for the convenience of the reader; Syndio is not responsible for the contents on linked pages.
