Today is Equal Pay Day, a day that brings awareness to the wage gap between men and women that still exists in America. It marks a date that symbolizes how far into the next year the average American woman would have to work to earn what an average American man earned last year. While Equal Pay Day has been observed since 1996, pay inequality based on gender is particularly topical in light of recent headlines.
For example, top players from the U.S. Women’s National Soccer team have filed a lawsuit against U.S. Soccer for wage discrimination. Jennifer Lawrence recently wrote about her experience discovering her male costars on American Hustle were paid significantly more than her. And the National Women’s Law Center’s new study found that, over the course of a 40-year career, a woman makes a whopping $400,000 less than a man. For women of color, the gap is even wider.
While there can be many reasons for the differences in pay between men and women in certain industries and jobs, including the likelihood that more women take time off for family responsibilities that interrupt their careers, no industry is immune from unfair pay inequality. HR departments have a critical role to play in ensuring their companies are paying equitably based on the value of the job and the incumbent’s performance in that job regardless of gender. Here’s what you can do:
Review the evolving federal and state legislation relating to fair pay practices. In January the Lilly Ledbetter Fair Pay Act’s final rule was implemented, prohibiting federal contractors from retaliating against employees or applicants talking about their compensation. The Equal Employment Opportunity Commission (EEOC) has proposed regulations to revise the Employer Information Report (EEO-1) to require all employers with more than 100 employees to include pay data by race, ethnicity and sex in their annual EEO-1 reports beginning in 2017. States are also enacting fair pay legislation.
Also in January, California passed a law extending pay equality that broadens the existing laws to permit comparisons of different genders and work in different geographical locations of the company having “substantially similar positions.” The example most frequently used is that of a maid and a custodian. While not performing the same function, these roles require similar levels of responsibility and training.
As federal and state governments tackle equal pay, it’s important for HR departments to be totally up to speed on new regulations and understand what they need to do to be compliant. Check out these helpful resources to make sure your department is completely compliant in pay equity regulations.
Employers should be regularly auditing their compensation structures and processes to see how they stack up when it comes to pay equity. As part of this audit (and as new jobs are added) you should do a thorough review of all job duties and compare those to incumbent employee compensation for that job. Employees who have the same levels of performance, required skills, years of experience, level of education and amount of responsibility, should all be paid similarly.
Supervisors and managers who make decisions about compensation should be thoroughly trained to document the reasons employees are paid what they are paid and to handle compensation conversations with employees. Employers will have the burden of proof to show that differences in pay are based on objective factors, not gender, if challenged.
It’s no secret that pay transparency can improve economic output and that pay fairness can be an emotional issue for some employees, so you should consider adopting more transparent compensation practices. In some industries, such as in the federal sector and unionized environments, pay is already open. For private sector businesses that are not ready for full transparency, some companies are adopting the practice of disclosing the median salary for jobs so that employees can compare their pay to that number. As part of providing this pay transparency, make sure that employees know if there are any merit, productivity (i.e. sales goals) or seniority systems in place in the company. This will help employees understand why someone with the same job function is being compensated differently, and it will also help them know if they need to step up their game to get the pay they want. It also enhances company culture by helping employees take responsibility for their own personal development to reach performance and career goals.
Gender pay inequality in the workplace is a national problem. HR can do something about it in their organizations, ensuring that their company is not part of the national gender pay inequality statistics and is viewed as a great place to work. Although making sure you’re compliant, objective and more transparent can be a lot of work, it can close the wage gap, which will have a positive impact on your business and company morale, as well as on the overall economy. We all have something to gain by solving wage inequality, and HR stands on the front lines to ensure that happens.