After pushing through the frantic period of year-end reviews and open enrollment, Human Resource and Payroll teams may bristle at another task. But after the 2025 dust settles, early 2026 is the perfect time to develop a plan for pay equity compliance and an audit. A strategic approach to pay equity pays off in big ways. Below, we outline some ways to build internal support for a pay equity initiative next year.

• Lighten the load by streamlining internal processes. Multi-state employers must contend with a patchwork of state and local pay equity laws. Several states now require pay disclosures in job postings, and California mandates large employers to report pay data to the California Civil Rights Department. To simplify compliance, start by standardizing job descriptions and pay ranges, enabling the organization to create reliable, easy-to-use databases for job postings and reporting. AI tools can help cut down on administrative work initially, but it’s important to involve legal counsel to ensure any updates to job descriptions and pay ranges meet pay equity requirements.
• Reduce litigation risk. Employers that conduct regular pay equity audits are better equipped to spot potential issues and address them proactively. This is especially important in jurisdictions that require salary ranges to be posted or pay data reported, where compensation information might be accessible outside of legal cases and used by potential plaintiffs or authorities as proof of discrimination.
• Strengthen retention and recruitment. When employers lay the groundwork for a culture dedicated to pay equity, it strengthens morale in the workplace and attracts talented workers. According to research by SHRM, employees respond positively to pay equity and transparency. Employees surveyed who believed their organization was transparent about pay decisions were more likely to agree that workers were paid equally regardless of gender, race, or ethnicity.