Minding the Gap: 5 Steps Employers Can Take to Address Gender Wage Disparity

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No matter how you parse them, the numbers are staggering. On average, females in the U.S. workforce are paid $0.80 for every dollar earned by their male counterparts—this according to the Institute for Women’s Policy Research (IWPR). The news is even worse for women of color, with African Americans making $0.63 and Latinas $0.54 compared to each dollar paid to white men—figures that make it hard to imagine the Equal Pay Act was passed more than 55 years ago.

The aggregate statistics are even more mind-blowing. According to the National Committee on Pay Equity, the total estimated earnings lost by a woman compared to a man over the span of a nearly 50-year career are $700,000 for a high school graduate, $1.2 million for a college graduate, and $2 million for a professional school graduate. There is more. Research by the IWPR suggests that if the sexes were compensated equally, the poverty level in this country would be cut in half and women would add $513 billion to the nation’s economy.

No doubt about it, women are being shortchanged, literally. And while there has been a significant narrowing of the gender pay gap since 1980, when, according to the Pew Research Center, women overall made 64 percent as much as men did in hourly earnings, the current pace of correction has largely stalled, and pay parity will not be realized for many decades—perhaps even a century. But why is this so?

Surveys indicate that women make up the majority of students on college campuses, yet they are not as likely as men to have careers in the most lucrative professions. The specter of discrimination and unfair treatment explains at least some of the disparity. And arguably, the continued inequality stems, in part, from the metrics that are used to determine pay and promotion and the inherent biases contained within them. But there is hope. More than five decades post-EPA, a bit of traction is being made once again.

Legislatures and Courts Weigh In



In moves designed to close the gender pay gap, legislation has been passed in several states, cities and one U.S. commonwealth that bans employers from inquiring about the compensation history of job applicants. In California, Connecticut, Delaware, Hawaii, Massachusetts, Oregon, Vermont, New York City, Philadelphia and Puerto Rico, such prohibitions are in place, all meant to minimize the risk that women will be compensated less than males based on their previous earnings. Similar laws seeking to promote the payment of objectively fair wages are also on the books in New Jersey, New York, Pennsylvania, Chicago, Louisville, New Orleans and Kansas City, though these apply only to certain government employers.

The courts are speaking out too. Out West, the U.S. Court of Appeals for the Ninth Circuit Court recently weighed in on the issue and held that salary history cannot be used to justify pay inequity between males and females. Translation: businesses in Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon and Washington can no longer justify compensating a woman less than a man for the same or substantially similar work simply by virtue of her prior position. Employers that do so will be in violation of the EPA.

Finally, in a nod to equal opportunity that can serve to lessen—if not eliminate—the pay divide between the sexes, California has enacted a law requiring publicly held corporations domiciled in the Golden State to have in place at least one female board member by the end of 2019—a number that, in certain circumstances, must double by 2021. Presumably, with more women in these positions of power, the financial fate of the female workforce will vastly improve.

What Can the Private Sector Do?



Clearly, the push to address the gender pay gap should not stop at the doorsteps of governors or courthouses. Companies must play an active and self-directed role in correcting pay inequality. The good news is that there is plenty they can do toward that end.

  • Conduct Pay Audits



First on the agenda for employers, pay audits that can provide a greater understanding as any existing gender pay disparity. These audits should include a review of salary and bonus data by gender, department, tenure, age, education and location.

  • Use Objective Indicators at Job Interviews



Employers, wherever they may be located, should not ask prospective employees questions about their salary histories, and instead inquire about compensation expectations and otherwise focus on objective indicators like work experience and productivity in current and past jobs.

  • Uniform Policies



Every company—and particularly those doing business in multiple jurisdictions with differing salary history laws—might consider implementing a uniform policy concerning parameters for interviewing and hiring. With a standardized approach, management can properly train company supervisors and human resources professionals to ensure fair hiring practices.

  • Ensure Women Have an Equal Opportunity for Advancement



The professional development and advancement of female employees can be fostered with appropriate mentoring, performance evaluations, training and access to opportunity. At the same time, management can be coached to better understand the impact of gender bias on decision-making, especially with respect to promotions.

  • Empower Female Employees and Promote Equitable Pay



Above all else, employers can strive not only to embolden women to advocate on their own behalf, but also to inspire them to do so. Likewise, companies large and small are encouraged to adopt a very simple mantra: equal pay for equal work.

  • A Challenge to Employers



Fifty-plus years after President John F. Kennedy signed the EPA into law, the gender pay gap still exists. And while government continues to do its part to address the disparity, the needle is hardly moving. In the wake of this enduring inequality, it is incumbent upon employers to take action, raise awareness within their respective industries and not only narrow the divide, but eradicate it altogether. Corporate America, beware: the failure to do so could come at a cost beyond that borne by women, with discrimination and related class action lawsuits and reputational damage an ever-present threat.

Dana A. Kravetz is the firm managing partner of Michelman & Robinson (M&R), a national law firm headquartered in Los Angeles, with additional offices in Orange County (California), San Francisco, Chicago and New York City. Also the leader of M&R’s hospitality industry group, Kravetz focuses his practice on the representation of hotel and restaurant management, handling a range of employment law matters—discrimination, wrongful termination, whistleblower and class action litigation, sexual harassment prevention, workforce reduction, hiring best practices and wage and hour issues, among them. He can be contacted at 310-299-5500 or dkravetz@mrllp.com. For more information, visit http://www.mrllp.com/professionals-Dana-Kravetz.html.

Kathryn Lundy is counsel at the firm. She also represents clients in the hospitality industry, and advises them in a range of matters related to labor and employment law. Lundy can be contacted at 212-730-7700 or klundy@mrllp.com. For more information, visit http://www.mrllp.com/professionals-Kathryn-Lundy.html.

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