Earlier this month, Puerto Rico became the latest US jurisdiction to mandate that employers pay men and women equally for the same work, when Governor Ricardo Rosselló signed the Puerto Rico Equal Pay Act, a bill modeled on the federal Equal Pay Act of 1963 but updated with some new provisions regarding salary histories and pay transparency. Jackson Lewis attorneys Maralyssa Álvarez-Sánchez and Juan Felipe Santos outline how the new law aims to enforce gender parity in compensation at the National Law Review :
Pay Discrimination Prohibition. Like the federal Equal Pay Act, Act 16 establishes a general prohibition of pay discrimination based on sex among employees in jobs that require equal skill, effort, and responsibility, and that are performed under similar working conditions, except where such payment is made pursuant to (i) a seniority system; (ii) a merit system; (iii) a system which measures earnings by quantity or quality of production; or (iv) a differential based on any other factor other than sex.
Past Salary History Inquiries Prohibited. Act 16 prohibits employers from inquiring into an applicant’s past salary history, unless the applicant volunteered such information or a salary was already negotiated with the applicant and set forth in an offer letter, in which case an employer can inquire or confirm salary history.
Pay Transparency. Act 16 forbids employers from prohibiting discussions about salaries among employees or applicants, with certain exceptions for managers or human resources personnel. It also contains an anti-retaliation provision protecting employees who disclose their own salary or discuss salaries with other employees, object to any conduct prohibited by the law, present a claim or complaint, or participate in an investigation under Act 16.
Willis Towers Watson’s 2016 Global Workforce Study has forged another link in the chain connecting perceptions of pay equity and fairness to employee engagement. The survey showed that compensation is still a top driver of employee attraction and retention (CEB’s Global Talent Monitor agrees), but also found that only a slim majority—53 percent—of employees believe they are paid fairly compared to people in similar roles at other organizations, and most organizations do not have plans in place to address this perception problem:
So far, many employers have not laid the ground work to ensure employees are paid fairly. The 2016 Global Talent Management and Rewards Survey, a survey of more than 2,000 companies globally, including 441 from the U.S., found only half of employers (52%) have a formal process in place to ensure fairness in compensation distribution.
The Global Workforce Study also measured whether employees understand how their base pay is determined and how their total compensation stacks up compared with others. Only about two-thirds of employees (65%) say they understand how their salary is determined, and less than four in 10 employees say they understand how their total compensation compares with that of the typical employee in their organization (39%) and with the typical employee in other companies (34%). When organizations begin to report on the CEO pay ratio and the pay of the median employee, these employees will not have the context to properly interpret those numbers.
This finding speaks to some of the trends motivating the increasing pressure on employers to be more transparent about what they pay their employees and why.
‘Equal Pay Day,” a symbolic event to raise awareness of the gender pay gap, marks how far into the year the average American woman has to work to make up the gap with what her typical male colleague earned in the previous year. This year, Equal Pay Day was observed on April 12, but for black women, the pay gap is much worse; they didn’t get their Equal Pay Day until this Tuesday, Catherine Pearson reports at the Huffington Post:
August 23, 2016 is African American Women’s Equal Pay Day ― the day when black women finally catch up to white men’s pay from the last year. It’s a staggering fact. On average, black women in this country must work almost eight more months to simply earn what white man earned by last December 31st. Black women are paid 63 cents for every dollar white men earn. For white women, it’s 78 cents. …
The pay gap costs black women $877,480 over their careers. According to a recent analysis by the National Women’s Law Center (NWLC) a black woman starting her career today (and working full-time, year round) will lose an average of $877,480 over her 40-year career, relative to a white man. In six states (New Jersey, Louisiana, Connecticut, California, Massachusetts and Washington D.C.) black women stand to lose more than $1 million over the course of their careers.
That means a typical black woman has to work more than 66 years to earn what a white man does in 40. The pay gap for black women is partly a result of their being concentrated in low-paying occupations, and partly to their being even more likely than white women to have to balance work and family caregiving obligations, forcing them to work shorter hours. Even so, Pearson points out, much of the gap remains unexplained by such “structural” factors, suggesting that black women are indeed discriminated against in pay.
Open Grid Scheduler/Flickr/PD
In advance of the United State of Women summit, held at the White House on Tuesday, the Obama administration announced on Monday that 28 organizations, including CEB and a number of other major employers, had signed onto its Equal Pay Pledge, through which they commit “to take action within their organizations by conducting an annual company-wide gender pay analysis across occupations, reviewing their hiring and promotion processes, embedding equal pay efforts into broader enterprise-wide equity initiatives, and identifying and promoting other best practices that will help ensure wage fairness for all workers”:
As part of this announcement, 28 companies have signed on to the pledge, including Accenture, Airbnb, Amazon, American Airlines, BCG, Buffer, Care.com, CEB, Cisco, Deloitte, the Dow Chemical Company, Expedia, Inc., Gap Inc., Glassdoor, GoDaddy, Jet.com, Johnson & Johnson, L’Oréal USA, PepsiCo, Pinterest, Popcorn Heaven, PwC, Rebecca Minkoff, Salesforce, Slack, Spotify, Staples, and Stella McCartney. Additional companies are invited to join this effort in the coming months.
The pledge is part of a suite of government, private sector, and nonprofit initiatives being rolled out at the summit, all geared toward protecting the rights and improving the opportunities of women and girls.
Last Thursday, Maryland Governor Larry Hogan signed a bill into law that is intended to help close the gender pay gap, partly by making it harder for employers to prevent employees from revealing to each other how much they earn. Vox’s Emily Crockett explains how the law is supposed to accomplish its goals:
Some employers either explicitly or implicitly ban the discussion of salaries, because they’re afraid of stoking resentments or revealing inequities. And this lack of pay transparency is one major cause of the wage gap. Unconscious bias means women are frequently offered lower salaries for various reasons, and sometimes employers have no idea that they’re consistently paying women less than men until they conduct pay audits.
The way the system is currently set up is also incredibly unfair to low-wage workers, most of whom are women, [Charly Carter, executive director of Maryland Working Families,] said. For practical purposes, many of them have little or no legal protection against retaliation. All they can do is appeal to the National Labor Relations Board (NLRB) — a lengthy process that not even all workers can avail themselves of.
“If you’re making minimum wage, if you’re making $30,000 a year, you don’t have two years and lawyers’ fees to go after your employer for treating you badly,” Carter said.
Following the recent pay gap controversy inside women’s professional tennis, the New York Times reports that five star players from the US women’s national soccer team have filed a complaint with the Equal Employment Opportunity Commission alleging that their counterparts on the men’s national team are paid significantly more, despite the fact that the women’s team has performed significantly better. The team won their third World Cup last year, a gold medal in the last Olympics, and have become the standard bearer for soccer in the US, regularly drawing superior crowds and television ratings.
The women, who say they are filing on behalf of their teammates, have asked the commission to investigate the US Soccer Federation, which they report has paid them as little as 40 percent of what men’s team players make, and also shortchanged them on bonuses, appearance fees, and per diems:
The players involved in the complaint are among the most prominent and decorated female athletes in the world: the co-captains Carli Lloyd and Becky Sauerbrunn, forward Alex Morgan, midfielder Megan Rapinoe and goalkeeper Hope Solo. …
“We have been quite patient over the years with the belief that the federation would do the right thing and compensate us fairly,” Lloyd, the most valuable player of last year’s Women’s World Cup, said in a statement released by the players and [their lawyer, Jeffrey Kessler.]
Solo was more blunt in the statement, directly comparing the women’s achievements with those of the men’s national team.
Salesforce HQ in California (Ken Wolter/Shutterstock.com)
Last November, Salesforce CEO Marc Benioff announced that his organization had spent $3 million assessing and closing pay gaps between its male and female employees. In a blog post published on Tuesday, Salesforce’s EVP of Global Employee Success Cindy Robbins released more details of the assessment, including that 6 percent of the company’s 17,000 employees (or about 1,000 people) had received salary adjustments, and that “roughly the same number of women and men were impacted.” Robbins also touted some other activities Salesforce had undertaken to make itself more inclusive of women and minorities:
To build a more diverse workforce, we’ve doubled down on our community outreach efforts to nonprofits and educational groups focused on diversity in tech, added more diverse schools to our recruiting efforts, and increased our support for STEM education initiatives that touch diverse populations. We’ve also increased access to advancement opportunities through the High-Potential Leadership Program, which is designed to provide leadership skills to advance women in the workplace. The program has led to a 33 percent increase in the number of women who were promoted last year.
In the last year, Salesforce has increased parental leave to 12 weeks off at 80% of total pay, including base and bonuses. The company also introduced a new gradual return program which offers new parents the flexibility to work reduced hours for the first four consecutive weeks of returning to work, at full pay.