equal pay Archives

July 8, 2019June 29, 2023

Why Was a Stadium Full of People in France Chanting ‘EQUAL PAY’?

Indisputable fact No. 1: Women and men should earn the same pay for the same work.

Indisputable fact No. 2: The players on the United States women’s national soccer team earn substantially less than their counterparts on the men’s team

The Equal Pay Act requires that an employer pay its male and female employees equal pay for equal work. The jobs need not be identical, but they must be substantially equal. Substantial equality is measured by job content, not job titles.

The Act is a strict liability law, which means that intent does not matter. If a woman is paid less than male for substantially similar work, then the law has been violated, regardless of the employer’s intent.

This strict liability, however, does not mean that pay disparities always equal liability. The Equal Pay Act has several built-in defenses, including seniority, merit, quantity or quality of production, or any other factor other than sex.

Which brings us to indisputable fact No. 2, and the stadium chanting “equal pay.”

Two things of note happened in the U.S. soccer world on Sunday. The women won their fourth World Cup title, dominating the entire tournament, including the Netherlands 2-0 in the final. Meanwhile, the men lost the CONCACAF Gold Cup final 1-0 to Mexico.

The women’s team currently is engaged in a gender discrimination lawsuit against the United States Soccer Federation, claiming that the organization pays its male players way more than its female players. How much more? According to documents obtained by the Guardian, for example, each player on the U.S. women’s national team could receive more than $260,000 for winning the Women’s World Cup; each player on the men’s national team could earn more than four times that amount for winning the World Cup.

Last I checked, $260,869 does not equal $1,114,429. That’s a pay gap. Which could be legal under the Equal Pay Act, but only if it’s based on a factor other than sex. And this is where I plead ignorance. U.S. Soccer says that any pay differences are “based on differences in aggregated revenue.” I have no idea whether that’s true or false, but if true it might qualify as a “factor other than sex.”

What I do know, however, is that U.S. Soccer cannot justify these pay differences based on merit or success. The FIFA Women’s World Cup has been held eight times — the U.S. women’s team has won four of them, and has never placed worse than third. In the same time frame, the men’s team failed to even qualify for the 2018 World Cup and has never finished better than the quarter-finals (once, in 2002). The U.S. women have also won four Olympic gold medals, nine out of 10 CONCACAF Women’s Gold Cups, and are the No. 1 ranked team in world.

And, on the same day the women’s team won the World Cup, the men’s team lost the CONCACAF Gold Cup final (no offense to North American. Caribbean, and Central American soccer, but winning the CONCACAF Gold Cup is the equivalent of a AAA baseball team winning its league — it’s nice to win, but you’re not beating the best players on the best teams in world).

Based on results, it seems to me that not only should the women’s team be paid equally with the men’s team, but that there exists a great argument for the scale to be flipped, with the women’s team earning substantially more than do their male counterparts.

So, soccer fans and legal scholars, educate me. Why are the women paid so much less than the men?

I want to understand. Help me understand.

January 9, 2019June 29, 2023

What Does It Mean for Jobs to be “Substantially Equal” Under the Equal Pay Act?

The Act is a strict liability law, which means that intent does not matter. If a women is paid less than male for substantially similar work, then the law has been violated, regardless of the employer’s intent.

This strict liability, however, does not mean that pay disparities always equal liability. The EPA has several built-in defenses, including seniority, merit, quantity or quality of production, or any other factor other than sex.

A recently filed case out of Boston delves into these issues.

According to CBS News, Elizabeth Rowe, the Boston Symphony Orchestra’s principal flutist, claims that her employer unlawfully pays the principal oboist (a man) about $70,000 more per year.

According to the lawsuit, “Both the principal oboe and principal flute are leaders of their woodwind sections, they are seated adjacent to each other, they each play with the Boston Symphony Chamber Players, and are both leaders of the orchestra in similarly demanding artistic roles.”

How did the oboist end up earning more? According to the lawsuit, the orchestra lured him away from the Metropolitan Opera Orchestra with the promise of higher pay. Rowe claims that she should be paid equally for similar work, regardless of the circumstances of his recruiting.

The orchestra claims that gender plays no role in how it sets salaries, which instead are determined by a variety of non-discriminatory factors, such as the difficulty of the oboe and its smaller pool of musicians.

What does it mean for two positions to be “substantially equal?’” According to the EEOC, employers should balance these five factors:

Skill: Measured by factors such as the experience, ability, education, and training required to perform the job. The issue is what skills are required for the job, not what skills the individual employees may have. For example, two bookkeeping jobs could be considered equal under the EPA even if one of the job holders has a master’s degree in physics, since that degree would not be required for the job.

Effort: The amount of physical or mental exertion needed to perform the job. For example, suppose that men and women work side by side on a line assembling machine parts. The person at the end of the line must also lift the assembled product as he or she completes the work and place it on a board. That job requires more effort than the other assembly line jobs if the extra effort of lifting the assembled product off the line is substantial and is a regular part of the job. As a result, it would not be a violation to pay that person more, regardless of whether the job is held by a man or a woman.

Responsibility: The degree of accountability required in performing the job. For example, a salesperson who is delegated the duty of determining whether to accept customers’ personal checks has more responsibility than other salespeople. On the other hand, a minor difference in responsibility, such as turning out the lights at the end of the day, would not justify a pay differential.

Working Conditions: This encompasses two factors: (1) physical surroundings; and (2) hazards.

Establishment: The prohibition against compensation discrimination under the EPA applies only to jobs within an establishment. An establishment is a distinct physical place of business rather than an entire business or enterprise consisting of several places of business. In some circumstances, physically separate places of business may be treated as one establishment. For example, if a central administrative unit hires employees, sets their compensation, and assigns them to separate work locations, the separate work sites can be considered part of one establishment.

I don’t enough about symphony orchestras to know how these factors all shake out in Boston. It seems to me, however, that a recruiting bump to lure someone from another employer is a solid “factor other than sex.”

Also read: Your 2019 Employment Law Compliance Checklist

If you have concerns that men and women in your workplace are being paid differently for similar work, you should audit you pay practices, and, if necessary, even them out, before the government or a plaintiff comes calling.

December 19, 2018June 29, 2023

Use Pay Equity to Attract Top Talent

With unemployment at a near 50-year low and job switching on the rise, employers are struggling to attract and retain the skilled talent they need. From increasing wages, to offering better benefits and workplace perks, employers are pulling out all the stops to lure talent. With that in mind, reviewing pay practices for gender pay equity — an issue that is very important to today’s workers — could also offer a potential competitive advantage in attracting and retaining top talent.

We recently issued a new report at the ADP Research Institute, or ADPRI, titled “Rethinking Gender Pay Inequity in a More Transparent World,” to give more insight into what key factors contribute to the gender wage gap in the United States today. The study analyzed data over a six-year period, tracking 11,000 employees between 2010 and 2016, and looked at fluctuations in annual salary and incentive pay during that time. One key finding was that lower negotiated incentive pay — such as annual bonuses — at time of hire might become a limiting factor that prevents career advancement down the road. This new data tells us that the gender pay gap is actually wider than we thought because women are not receiving the same bonus-to-base ratio as their male counterparts.

Also read: 3 Steps for HR to Achieve Pay Equity

HR managers can use findings from this study as a benchmark to compare where their company stands in order to determine where changes may need to be made. Some of the report’s key findings include:

Women, on average, earn a 17 percent ($15,000) lower salary than men. However, when factoring in the gender pay gap for bonus pay (69 percent), the total earnings pay gap widens to 19 percent ($18,500).
Women ages 20 to 30 with a low starting salary had near equal base salary of men; however, the gap worsened for females after six years. Additionally, when a bonus is factored in, young women fared the worst with a 21 percent less bonus-to-base ratio compared to their male counterparts.
Women ages 40 to 50 started their careers with almost no base salary gap for all categorized income groups. The discrepancy was with incentive pay, especially with the lower income group. In the $40,000 to $60,000 income range, female workers received an average bonus of 8.5 percent, whereas men received 11.4 percent — a gap of 74 percent.
Women in the information industry make 7 percent more in bonus-to-base ratio than men, which reduced their overall gap in total earnings. In contrast, women in the finance and real estate industries are earning 21 percent less in their bonus-to-base ratio compared to men. These industries have the largest pay gap for women with and without incentive pay.
The average bonus amount for women was less than two-thirds the amount paid to men who had equivalent base pay, age and time with the company. This incentive pay disparity was observed across all age, salary and industry groups from the moment of hire and persisted throughout the six-year study window.

Consider Candidates Across All Age Groups

Finding skilled talent today is very challenging, which makes it critical for employers to look across all demographics to secure the talent they need.

pay equity attract talent — The gender pay gap is actually wider than we thought because women are not receiving the same bonus-to-base ratio as their male counterparts, according to new ADP data.

In fact, when categorizing workers by age and gender, the study revealed something very important about men, women and new-hire attrition. From time to time, pundits have suggested that women are paid less than men because they are more likely to leave work to serve as the primary caregivers to children. Across the entire data sample, however, there is minimal evidence that women were more likely than men across any age group to quit work. After six years, only 11 percent of both men and women who were hired into exempt positions were still with their same employers — an overall average attrition rate of 15 percent annually.

It is clear that quit rates by gender are not an explanation for why men are more likely to be hired into higher-paying roles. In fact, a better predictor of attrition was not gender, but age. For the younger age group, females are more likely to quit than males. This trend is reversed for the older age group — at 50-plus, women have a greater likelihood of staying with the same job at a rate which is 42 percent higher than their counterparts.

Also read: 5 Ways to Fix the Gender Pay Gap

Be Fair and Inclusive

Fair pay practices are not merely an important “corporate value,” or a tool for managing compliance risk. Rather, creating and communicating about fair pay practices is also a core strategy to develop a vibrant, high-performing, engaged workforce, which can potentially help to stave off the competition in this current labor market. To accomplish this, HR leaders can:

Take a close look at employee total compensation, including both base and incentive pay, to identify any gender pay gaps.
Utilize industry benchmarks as a point of comparison to determine how best to address any issues.
Examine recruiting practices and guidelines given to those in hiring positions to negotiate salary and incentives for new hires.
Properly train managers who are responsible for performance reviews and associated pay increases on equitable pay practices.
Update HR technology to better monitor and analyze total compensation and track against organizational goals for gender pay equity.
Broadly communicate to managers and associates company policies on equitable pay practices to ensure transparency.

In today’s tight labor market, employers are finding it increasingly difficult to attract and retain skilled talent. While wage increases and robust benefits can play a key role in staving off the competition, as the market continues to tighten additional tactics may be necessary.

Also watch: Equal Pay Day Highlights Gender Inequality at Work

Gender pay equity is an issue that many workers today care deeply about. By effectively evaluating pay practices and communicating broadly about organizational goals to shrink the gap, employers can foster deeper engagement with employees and help win in the war for talent.