Salesforce Finds Closing Pay Gaps Is a Continuous Process

Salesforce Finds Closing Pay Gaps Is a Continuous Process

Salesforce has been on a quest to achieve gender pay equity across its entire workforce since 2015, when CEO Marc Benioff first announced that the company had spent $3 million assessing and closing pay gaps between its male and female employees, affecting 6 percent of its 17,000 employees, or about 1,000 people. However, as Benioff told CBS’s Lesley Stahl on “60 Minutes” last weekend, he and his leadership team at Salesforce soon discovered that closing the pay gap once wasn’t enough:

Marc Benioff: We did it the first time. We were so happy with ourselves. It was great. Then all of a sudden we kind of did our audit again and the same thing happened again. We’re, like, “How can this be?” But it turned out we had bought about two dozen companies. And guess what? When you buy a company, you just don’t buy its technology, you don’t buy its culture, you also buy its pay practices.

Lesley Stahl: So they would come in and the men were paid much more and then that got eaten up into your statistics, into your audit. So you had to redo the whole thing all over again, costing as much as the first time.

Marc Benioff: It cost us as much as the first time. In total, it’s now cost us $6 million.

Lesley Stahl: Are you gonna have to do this audit every year—

Marc Benioff: More than every year. We’re gonna have to do this continuously. This is a constant cadence. You’re gonna have to constantly monitor and keep track of that, but that’s easy today. We run our company the same way every company is run with computers and technology and software. … [T]here’s never been an easier time to make this change.

In a blog post on Tuesday, Salesforce Chief People Officer Cindy Robbins provided more detail about this year’s pay equity adjustment and how the company plans to manage the process going forward, now that they have realized the importance of addressing pay gaps continuously:

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UK Father’s Parental Leave Discrimination Claim Rejected on Appeal

UK Father’s Parental Leave Discrimination Claim Rejected on Appeal

The UK’s Employment Appeal Tribunal has overturned a controversial ruling from a lower court that a new father whose employer had declined to enhance his statutory pay while using shared parental leave had engaged in sex discrimination, Ashleigh Wight reports at Personnel Today:

Last year, the employment tribunal ruled that it was direct sex discrimination to allow new father Mr Ali only two weeks’ leave on full pay, when female staff were allowed to take 14 weeks’ maternity leave on their full salary. …

The EAT found the employment tribunal had erroneously interpreted that Mr Ali’s circumstances were comparable to those of a woman who had recently given birth as both had leave to care for their child. The EAT said the purpose of maternity pay and leave is to recognise the “health and wellbeing of a woman in pregnancy, confinement and after recent childbirth”.

Mr. Ali, a former Telefónica employee, had transferred to a job at Capita but remained covered by his former employer’s policies, which offered 14 weeks of enhanced maternity pay to mothers on leave but only two weeks’ leave at full pay to new fathers. His wife had returned to work not long after giving birth, based on medical advice that doing so might help alleviate her postpartum depression, leaving Mr. Ali to care for the baby. When he was told that he was only entitled to the statutory rate prescribed in the UK Shared Parental Leave law for his paternity leave beyond the first two weeks, he sued, and a tribunal ruled in his favor last June.

The nonprofit organization Working Families, which advocates for parental leave and other work-life balance benefits for UK workers, cheered the appeals tribunal’s ruling, saying that a final ruling in the plaintiff’s favor would have resulted in employers abandoning enhanced parental pay for mothers rather than extending it to fathers as well, Wight adds:

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How Do We Close the Gender Pay Gap?

How Do We Close the Gender Pay Gap?

Equal Pay Day is a symbolic event that highlights the pay gap between men and women in the US. Equal Pay Day is held on a Tuesday, representing how far into the next week the average woman has to work to earn what the average man earned the week prior, and in early April to represent how much farther into this year she needs to work to earn as much as he did last year. While individual studies differ slightly, nearly all of them calculate the overall US gender pay gap at around 20 percent, meaning women earn roughly 80 cents to every man’s dollar. (It bears mentioning that these figures are significantly worse for women of color.)

To a significant extent, this gap reflects women being offered lower salaries than men for the same or similar work. Fast Company’s Lydia Dishman points to some recent research by Hired that suggests women are often being lowballed:

The majority (63%) of the time in the U.S., men are offered higher salaries than women for the same role at the same company, according to wage gap data and survey responses compiled by Hired. On average, these companies offer women 4% less than men for the same role, with some offering women up to 45% less. These numbers are likely due to unconscious bias, inconsistent pay practices, and paying new hires based on what they made in their previous role. “Our data found that 66% of the time, women are asking for less money–6% less on average–than men for the same role at the same company,” says Kelli Dragovich, senior vice president of people at Hired. Undervaluing themselves is part of the reason, she says, as 50% of female survey respondents said they experienced impostor syndrome most of the time.

However, even companies that pay men and women equally for equal work still have pay gaps, because women are often concentrated in professions with lower earning potential. Our recent research at CEB, now Gartner, finds that these group-to-group gaps account for most of the global gender pay gap of 27 percent, although 7.4 percentage points remain unexplained by factors like size, industry, geography, education, or experience.

The main cause of this larger pay gap is the sorting of women into lower-paying roles, or occupational segregation, Maggie Koerth-Baker explains at FiveThirtyEight. That doesn’t mean women are choosing to earn less money, however, and “the fact that certain industries are dominated by men or women — and that the men’s jobs pay more — has never just been about what qualifications an individual did or didn’t have, or how tough the job was to do”:

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New York Governor Advances Legislation to Ban Salary History Inquiries

New York Governor Advances Legislation to Ban Salary History Inquiries

New York State Governor Andrew Cuomo on Tuesday announced the introduction of a bill that would ban all public and private employers who do business in the state from asking job candidates about their prior compensation. The legislation, advanced on Equal Pay Day, coincided with the release of a report (pdf) from the state’s Department of Labor on the status of the gender pay gap in New York and how to close it. Banning salary history questions on job applications is just one of the reports wide-ranging policy recommendations:

This new legislation builds on two executive orders signed by the Governor last year to eliminate the wage gap by prohibiting state entities from evaluating candidates based on wage history and requiring state contractors to disclose data on the gender, race and ethnicity of employees – leveraging taxpayer dollars to drive transparency and advance pay equity statewide. Today’s legislation builds on legislative efforts to address the issue and broadens the scope of Executive Order #161 to encompass all employers, not just state entities, in order to break the cycle of unfair, unequal compensation.

The report found that women in New York earn 89 cents for every dollar earned by men—a narrower pay gap than the national average of around 80 cents to the dollar:

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Salary Histories Can’t Justify Gender-Based Pay Disparities, Ninth Circuit Rules

Salary Histories Can’t Justify Gender-Based Pay Disparities, Ninth Circuit Rules

Differences in past salaries are insufficient to justify disparities in pay between male and female employees in the same role, the Ninth US Circuit Court of Appeals ruled on Monday. In an en banc rehearing of a case decided by a three-judge panel nearly a year ago, the court’s 11 judges unanimously ruled in favor of Aileen Rizo, a California school employee who learned in 2012 that her male counterparts were making more than she was and filed a discrimination suit under the Equal Pay Act.

The panel last year, citing a 1982 ruling by the court that said employers could use salary history information as long as they applied it reasonably, had overturned a 2015 decision by US Magistrate Judge Michael Seng, which held that the Fresno, California, school district’s pay structure perpetuates gender-based wage disparities. Monday’s opinion, authored by the late judge Stephen Reinhardt before his death last month, reaffirmed Seng’s ruling, concluding that ” allow employers to capitalize on the persistence of the wage gap and perpetuate that gap ad infinitum—would be contrary to the text and history of the Equal Pay Act, and would vitiate the very purpose for which the Act stands”:

We conclude, unhesitatingly, that “any other factor other than sex” is limited to legitimate, job-related factors such as a prospective employee’s experience, educational background, ability, or prior job performance. It is inconceivable that Congress, in an Act the primary purpose of which was to eliminate long-existing “endemic” sex-based wage disparities, would create an exception for basing new hires’ salaries on those very disparities—disparities that Congress declared are not only related to sex but caused by sex. To accept the County’s argument would be to perpetuate rather than eliminate the pervasive discrimination at which the Act was aimed.

Reinhardt’s opinion will cheer critics of salary histories, who argue that using this information to set pay enables the persistence of unjustifiable gender-based pay gaps throughout an employee’s career.

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More than 3 in 4 UK Companies Pay Men More than Women, Gender Pay Gap Reports Show

More than 3 in 4 UK Companies Pay Men More than Women, Gender Pay Gap Reports Show

The deadline for UK companies with at least 250 employees to publish their gender pay gaps arrived on Wednesday. According to the BBC, more than 10,000 companies in total submitted their data, 1,000 of them waiting until the last day to do so. Overall, the median pay gap among those reporting stood at 9.7 percent, with 78 percent of firms paying men more than women, 14 percent paying women more, and 8 percent reporting no pay gap at all. An analysis in January had predicted that a significant number of companies would ultimately miss the deadline, and indeed, hundreds have failed to report, Rebecca Hilsenrath, chief executive of the Equality and Human Rights Commission, told the BBC:

“We’re looking at approximately 1,500 companies which haven’t reported,” she told the BBC. “We’re obviously pleased with the rate of reporting, but it is the law, it’s not an option. It is the right thing to do, and we will be enforcing against all those organisations which failed to meet the deadline.”

In practice, this would mean a statutory investigation process, she said. The EHRC will be sending letters to all of those organisations on Monday. They will then have 28 days to respond. Terms of reference will then be issued for the enforcement process, which will be made public. “This is going to be a very public affair. It will impact quite considerably on members of the public, people who work for them, and you’ll see a growing backlash against people who aren’t complying,” she said.

The EHRC had previously warned that organizations face “unlimited fines” for failing to comply with the gender pay gap reporting law. The more effective punishment, however, may be the “very public affair” Hilsenrath is promising. Senior British professionals indicated in a survey late last year that they believed revelations of large gender pay gaps would hurt companies’ reputations and cause them to lose employees, with more than a third saying they thought this issue would be even more reputationally damaging than corporate tax avoidance.

At CEB, now Gartner, our latest research into pay equity finds that perceptions of pay inequality can be just as harmful to employee retention as pay inequities in fact—and the perceptions tend to be even worse than the facts.

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Michigan’s Preemption of Salary History Bans Bucks the Trend, but Won’t Reverse It

Michigan’s Preemption of Salary History Bans Bucks the Trend, but Won’t Reverse It

Last week, Michigan Governor Rick Snyder signed into law a bill preempting local governments within the state from regulating the questions employers are allowed to ask candidates during job interviews. The broad anti-regulatory measure is aimed specifically at restricting local ordinances prohibiting inquiries about candidates’ salary histories, Jackson Lewis attorneys Stacey A. Bastone and K. Joy Chin observe at the firm’s Pay Equity Advisor blog, reinforcing a 2015 law that prohibited local administrations from banning these questions on job applications:

At the time of the bill’s signing, no municipality in the state had proposed an ordinance restricting pre-employment inquiries into salary history. Proponents of the bill contend that asking about an applicant’s past or current salary is a standard business practice and assists employers in budgeting. Opponents argue that soliciting salary history can perpetuate discriminatory pay gaps. …

Wisconsin’s legislature is also poised to pass similar legislation, they note, which Governor Scott Walker is expected to sign. Michigan and Wisconsin here are employing a legislative tactic that has become increasingly common in the past year among states with conservative governments to prevent their more liberal cities from implementing their own, more progressive employment regulations. At the same time, other, more liberal states are pursuing more employee-friendly labor regulations, including higher minimum wages, paid family leave and sick leave mandates, restrictions on the use of non-compete agreements, and even protections for employees who use marijuana in states where the drug has been legalized.

When it comes to salary histories, these midwestern states with Republican governors are going against the prevailing trend. Bans on these inquiries have been passed in California, Delaware, Massachusetts, Oregon, Puerto Rico, New York’s Albany County, New York City, and San Francisco, while 14 other states are considering them.

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