Last month, the White House Office of Management and Budget announced that it was putting on hold a rule proposed by the Obama administration in 2016 that would have required organizations with more than 100 employees to submit summary pay data to the Equal Employment Opportunity Commission each year showing what employees of each gender, race, and ethnicity earn. This reversal relieves employers of what opponents say are overly burdensome and costly regulations that would do nothing to address pay gaps.
For large employers in California, however, that relief may be short-lived. At the firm’s blog about California employment law, Seyfarth Shaw attorneys point to a piece of legislation that went to Governor Jerry Brown’s desk this week that would “require companies with at least 500 employees to compute differences between the wages of male and female exempt employees and board members located in California and file the report with the California Secretary of State,” which would then publish this information for public view:
If the bill is signed by Gov. Brown, beginning on July 1, 2019, and biennially thereafter, impacted employers will have to collect and compute:
- The difference between the wages of male and female exempt employees in California using both the mean and median wages in each job classification or title.
- The difference between the mean and median wages of male board members and female board members located in California.
- The number of employees used for these determinations.
This information would then be reported to the California SOS by January 1, 2020 (and biennially thereafter) on a form categorized consistent with Labor Code Section 1197.5—the California Fair Pay Act (“FPA”).
The bill, they add, does not establish that a gender wage gap in this information is a violation of the Fair Pay Act, but opponents claim it would not need to, as it “effectively forces employers to hand over to potential plaintiffs all information they might need to file a lawsuit, without any context that would explain permissible differentials.”
Three women have filed a lawsuit against Google, their former employer, in which they accuse the tech giant of systematically discriminating against women in pay and career development, and their lawyer is seeking class action status for the claim, the Associated Press reported on Thursday:
The suit, led by lawyer James Finberg of Altshuler Berzon LLP, is on behalf of three women — Kelly Ellis, Holly Pease and Kelli Wisuri — who all quit after being put on career tracks that they claimed would pay them less than their male counterparts. The suit aims to represent thousands of Google employees in California and seeks lost wages and a slice of Google’s profits.
“I have come forward to correct a pervasive problem of gender bias at Google,” Ellis said in a statement. She says she quit Google in 2014 after male engineers with similar experience were hired to higher-paying job levels and she was denied a promotion despite excellent performance reviews. “It is time to stop ignoring these issues in tech.”
The lawsuit, which has been in the works since June, follows an investigation by the US Labor Department that claimed to find “systemic compensation disparities against women” throughout the company. Google has strongly disputed the department’s allegations, insisting that it has no gender pay gap and publishing its pay methodology in April in an effort to refute them, and a judge ruled that the company did not have to hand over all the detailed pay data the government had demanded. Nonetheless, Finberg has said the suit is based partly on the Labor Department’s analysis.
New data released by the US Census Bureau on Tuesday shows that real median household income increased by 3.2 percent between 2015 and 2016, from $57,230 to $59,039, while the official poverty rate decreased by 0.8 percentage points to 12.7 percent. In absolute terms, that means 2.5 million fewer Americans were living in poverty last year than the year before, but 40.6 million still were. The 2016 poverty rate, the bureau notes, is only slightly higher than the 12.5 percent rate recorded in 2007, the year before the Great Recession began.
US workers’ incomes are also close to fully recovering from the recession, Aimee Picchi adds at CBS Moneywatch, with last year’s figures “just 1.6 percent below what households earned before the recession started in late 2007, according to the Economic Policy Institute, a left-leaning think tank”:
“We’re back to where we were before the recession,” said Sheldon Danziger, president of the Russell Sage Foundation, which focuses on poverty research. “You have an economy that has flat-lined for people with a high school degree or less since the 70s and flat-lined for the middle class during the last 20 years.” …
A few months after a public disclosure of high-earner compensation data revealed a significant pay gap between male and female stars at the BBC, the UK’s national broadcaster has announced a series of investigations into its pay practices and gender pay gap. BBC Director General Tony Hall revealed on Wednesday that he had commissioned PwC and the law firm Eversheds Sutherland to conduct an independent equal pay audit of the company, which will also produce an internal report on the gender pay gap and conduct a review of pay and diversity among its on-air talent:
Speaking to staff on Wednesday, Lord Hall said the BBC report on gender pay would cover the whole corporation and be independently audited, adding that he is “determined to close the gap”. … He said [the external audit] would “make sure that, where there are differences in pay, they’re justified”, adding: “If it throws up issues, we’ll deal with them immediately.”
The review of on-air talent will focus on presenters, editors and correspondents in BBC News and radio, he said. “Of course, we’ll be looking at pay – but also representation,” he said. “As I hope you know, we’ve set really ambitious targets – not just on gender, but on diversity more broadly.
In response to Hall, several leading women at the BBC circulated a statement on Twitter under the hashtag #BBCWomen, in which they stressed that the director “must be in no doubt about how serious an issue equal and fair pay is for women across the organisation,” and suggested that the target date he had previously set of 2020 for closing the gender pay gap was not soon enough:
Illinois was poised to become the latest US state to bar employers from inquiring about candidates’ salary histories after a bill passed both houses of the state congress by wide margins, but Governor Bruce Rauner vetoed the bill last Friday, which the Chicago Tribune reports is setting up a battle by the bill’s supporters to garner enough votes to override the veto:
Iliana Mora, CEO of the advocacy group Women Employed, said she was “shocked” and “disappointed” that Rauner blocked the bill, and plans to work with Republicans who supported the legislation on an override during the November veto session. The numbers could work in her favor. The bill passed the House 91-24 and the Senate 35-18, with one Senate member voting present. A veto override requires 71 votes in the House and 36 in the Senate.
Rep. Steve Andersson, R-Geneva, who voted for the bill, expressed optimism that the effort would succeed. “This bill has had strong bi-partisan support from day one,” Andersson said in a comment posted Friday evening to the Facebook page of Rep. Anna Moeller, D-Elgin, chief sponsor of the legislation. “It’s a bill that will right an important wrong. I have faith this will be law shortly. I will vote to override and I don’t think I will be alone…”
The bill would amend the Illinois Equal Pay Act to prohibit employers from asking candidates or their former employers to reveal how much they earned in previous jobs, using salary history criteria to screen candidates, or requiring employees to sign contracts that prevent them from disclosing their pay to others. It also would change the wording of a provision in the Equal Pay Act defining the grounds for discrimination claims: Currently, plaintiffs must show that they were paid unequally for “jobs the performance of which requires equal skill, effort, and responsibility”—the amendment would replace “equal” with “substantially similar.”
Writing at Lexology, Cozen O’Connor attorneys Joseph E. Tilson and Anna Wermuth describe Rauner’s veto as good news for Illinois employers, as the bill would make discrimination claims easier to press and harder to defend against:
Since early July, James M. Finberg, a partner at the San Francisco law firm Altshuler Berzon LLP, has been seeking out women who are current or former Google employees to join a class-action lawsuit over alleged gender discrimination in pay at the tech giant. Dozens of women had already reached out to the firm, but interest has accelerated in the wake of this week’s controversy over an inflammatory diversity memo circulated within the company by a now-fired engineer, Finberg tells Clare O’Connor at Forbes:
“The phone has been lighting up today,” said Finberg. “We didn’t have any control of that guy and his memo or the media firestorm. We’re going public a lot earlier than we’d hoped or expected.” Finberg has heard from more than 70 women so far. He has confirmed four for the planned suit, which he has not yet filed, and several others are considering joining, he said.
Google was already facing allegations of bias in its pay practices, after the US Department of Labor accused the company in April of “extreme” and “systemic” pay discrimination against women. Google vehemently denied these allegations, going so far as to make public its pay methodology in an effort to refute the department’s claims. The company won a partial victory in that case last month, when a judge ruled that it did not have to provide the Labor Department with all of the detailed pay data it had demanded. Google is still required to hand over some data, however, and the department is free to try again to obtain the other data it wants if it can convince the court that it is necessary.
Finberg tells O’Connor that his firm’s planned class action is based partly on the Labor Department’s analysis, “which found between six and seven standard deviations between wage rates of men and women based on a snapshot of the salaries of 21,000 workers at Google’s Mountain View headquarters.”
Coming at a time when Silicon Valley is struggling with sexual harassment scandals, allegations of gender pay discrimination, and a spotty track record overall at creating a welcoming work environment for women, a new analysis of US tech companies by Redfin and PayScale points to one obvious step tech companies can take that might go a long way toward solving those problems: namely, promoting more women into leadership positions.
For the study, Redfin examined executive teams at 31 of the largest tech companies in the US and compared those with a high rate of women on their executive teams (over 25 percent) to those with a low rate (under 20 percent), while PayScale looked at the salary profiled of over 6,500 current and former employees of these companies. Their combined analysis found that pay gaps between men and women were significantly lower at companies with high rates of female leadership: 91 cents to the dollar among all employees versus 77 cents on the dollar at companies with low rates. Correcting for job level and experience, the gap narrowed considerably but was still smaller at companies with more women executives (98 cents to the dollar versus 96)
This analysis is not the first to draw a link between women in leadership and narrower gender pay gaps. A study of bank branch employees published in the Academy of Management Journal earlier this year also found that women working as tellers under female managers were paid about the same as their male counterparts, while those managed by men were paid about 7.5 percent less.