Progressive Joins Ranks of Employers Abandoning Salary History Questions

Progressive Joins Ranks of Employers Abandoning Salary History Questions

Major US companies are continuing to drop the practice of asking job candidates for their salary histories nationwide in response to the proliferation of state and local laws barring them from doing so. The Progressive Corporation plans to add more than 7,500 new hires to its workforce in 2018, and won’t be asking any of them about their prior salaries as part of the process of setting compensation, the company announced in a press release last week:

Progressive recently decided it would no longer ask applicants about their salary history. “We’ve always based our pay on market research,” [Chief Human Resources Officer Lori] Niederst said. “We hope this change will give candidates who apply for our jobs confidence that they will be paid based on what they bring to Progressive, regardless of whether their previous employers paid them fairly.”

The Ohio-based automobile and homeowner’s insurance provider currently employs more than 33,000 people in almost 400 offices throughout the US. The company plans to hire extensively this year in Austin, Cleveland, Colorado Springs, Phoenix, Sacramento, and Tampa. Only one of these locations (Sacramento, California) is subject to a law prohibiting employers from inquiring about candidates’ salary histories, but Progressive is dropping these inquiries everywhere.

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Tesco Faces Discrimination Suit Over Pay Gap Between Store, Warehouse Employees

Tesco Faces Discrimination Suit Over Pay Gap Between Store, Warehouse Employees

The British supermarket chain Tesco is facing a massive pay discrimination claim from its mostly female shop floor workers, asserting that they should receive wages equal to those of the mostly male employees who perform similar work at the company’s distribution centers. The law firm Leigh Day is taking legal action on behalf of around 100 shop assistants, but the class action could affect as many as 200,000 workers, the Guardian reports:

Tesco warehouse staff earn from about £8.50 an hour up to more than £11 an hour while store staff earn about £8 an hour in basic pay, according to the claim. The disparity could mean a full-time distribution worker earning over £5,000 a year more than store-based staff.

The case follows similar actions against Asda and Sainsbury’s which are working their way through the employment tribunal process. Nearly 20,000 people are involved in the Asda case, where the latest ruling backed the shopworkers’ right to compare their jobs to employees – mainly men – working in distribution centres. Asda is due to appeal against that ruling at the court of appeal in October. About 1,000 workers are involved in the Sainsbury’s action.

An employment tribunal ruling against Tesco could cost the company as much as £4 billion, or £20,000 in back pay per employee. Leigh Day intends to argue that the pay discrepancy reflects implicit discrimination against store workers and other jobs traditionally held by women. The case will hinge on the question of whether the warehouse employees’ work is in fact more valuable to the company than that of the shop workers, one economist tells CNN Money:

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UK Report: Part-Time Work a Major Factor in Motherhood Penalty

UK Report: Part-Time Work a Major Factor in Motherhood Penalty

The latest report on the gender pay gap from the UK’s Institute for Fiscal Studies sheds some new light on precisely how becoming a mother leads women to earn less than men—the so-called “motherhood penalty”—and contributes to the gender pay gap. The BBC highlights the key findings:

The Institute for Fiscal Studies report found by the time a couple’s first child is aged 20, many mothers earn nearly a third less than the fathers. A key factor was women working part-time in motherhood, the report said. …

“The effect of part-time work in shutting down wage progression is especially striking,” the report added. “Whereas, in general, people in paid work see their pay rise year on year as they gain more experience, our new research shows that part-time workers miss out on these gains.” The vast majority of part-time workers were women, especially mothers of young children, the report said.

Other studies, including a previous version of the same IFS report, have identified the motherhood penalty as a major factor (if not indeed the factor) driving the gender pay gap over time. These studies have found that even when women and men start out their careers earning equal salaries, disparities begin to emerge in their late 20s and 30s, coinciding with the years in which women are most likely to have children. Because women are expected to take on the bulk of child care responsibilities, it is mothers who are usually forced to take career breaks or work part-time to make room in their schedules for these obligations, while fathers tend to remain at work.

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EasyJet CEO, BBC Stars Take Pay Cuts for Gender Equality

EasyJet CEO, BBC Stars Take Pay Cuts for Gender Equality

EasyJet, the discount airline based out of Luton, UK, announced on Monday that its CEO, Johan Lundgren, had asked the board to reduce his salary to match the compensation his predecessor Carolyn McCall was earning when she left EasyJet last year. Lundgren’s salary, originally set at £740,000, will now be reduced by 4.6 percent to £706,000, the company said in a statement. All other aspects of his remuneration package are identical to McCall’s.

The airline suffered a bit of negative press this month after publishing its gender pay gap in line with a new UK law requiring all organizations with over 250 employees to do so. EasyJet reported a 51 percent pay gap between men and women, attributable to the fact that its pilots—the most highly-compensated frontline employees in the industry—are 94 percent male. In Monday’s statement, EasyJet stressed that this imbalance was true of the entire commercial airline industry and that the company was taking steps to create more opportunities for women pilots:

Around 4% of commercial pilots worldwide are female. easyJet does better than the industry as a whole at 5% and easyJet’s progressive culture has enabled female pilots to progress more easily than at other airlines. In fact, over a third of easyJet’s female pilots are already Captains. But we recognise we need to do better. That is why three years ago easyJet launched our Amy Johnson Initiative to encourage more women to enter the pilot profession. We set a target that 20% of new pilots should be female by 2020, up from 6% in 2015.

Last year we recruited 49 female new entrant co-pilots. That’s a 48% increase on the previous year and takes the proportion of easyJet new entrant female pilots to 13%. This is a great achievement given the deep seated view in society that being a pilot is a male job and means the airline is on track to meet our 2020 target.

EasyJet’s announcement comes just days after the BBC revealed that six of its most high-earning male presenters had agreed to take pay cuts to close the gap with their female colleagues, :

The BBC said Huw Edwards, Nicky Campbell, John Humphrys, Jon Sopel, Nick Robinson and Jeremy Vine had all accepted reduced wages. … Vine said: “It needs to be sorted out and I support my female colleagues.”

The Radio 2 and Eggheads presenter was the best-paid of the group, earning between £700,000-£749,999 in 2016/17. The new salaries haven’t been revealed. Of the six, Jon Sopel, the BBC’s North America editor, earned the least, in the £200,000-£249,999 bracket – compared to Carrie Gracie’s £135,000-a-year salary.

Gracie, formerly the network’s China editor, resigned her position earlier this month in protest against the stark disparity in pay between male and female editors. The public disclosure of high earners’ salaries at the BBC last summer sparked major controversy when it was revealed that the broadcaster’s highest-paid talent was overwhelmingly white and male, while women were making much less than men in similar roles. BBC Director General Tony Hall later commissioned an equal pay audit of the company, which the BBC says will be published this week.

Bank of America Restricts Salary History Inquiries in Wake of Bans

Bank of America Restricts Salary History Inquiries in Wake of Bans

Bank of America has joined a growing number of major US companies that have decided to stop asking candidates for their salary histories or using that information to set compensation for new hires, in an effort to close gender and racial pay gaps, Bloomberg’s Jordyn Holman reports:

The policy, which takes effect in March, “restricts how we solicit compensation information from candidates during the hiring process,” Sheri Bronstein, the bank’s global head of human resources, said in a memo to employees this week. “We will implement it across the company to help ensure we consider new hires for individual qualifications, roles and performance, rather than how they may have been compensated in the past.”

Bank of America was already required to meet similar rules in states including Massachusetts and California. The bank’s most recent review found that female employees in the U.S. and U.K. are paid on average 99 percent of what male employees earn, after adjusting for factors including role in the organization, experience, work location and performance, according to the memo. Minority employees are also paid on average 99 percent what their non-minority colleagues make, the review found.

These results are identical to those found by Citigroup, one of Bank of America’s chief competitors, in a recent pay survey of its workforce in the US, UK, and Germany. Arjuna Capital, the activist arm of investment firm Baldwin Brothers Inc, had been pressuring both banks to address gender pay gaps by introducing shareholder resolutions that would require them to do so. Arjuna withdrew its proposals after the banks released their pay survey findings.

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NJ Governor Bans Salary History Inquiries at State Agencies

NJ Governor Bans Salary History Inquiries at State Agencies

In his first official act since taking office on January 16, New Jersey Governor Phil Murphy has issued an executive order barring state entities from asking job candidates for their salary histories. Murphy’s order is the beginning of what he says will be a series of efforts to address gender pay disparities in the state, Porzio Bromberg & Newman attorneys Kerri A. Wright, David L. Disler, Richard H. Bauch, and James H. Coleman, Jr., report at Lexology:

The Executive Order is scheduled to take effect on February 1, 2018. It prohibits State entities from inquiring into a job applicant’s current or previous salaries, until the entity has made a conditional offer of employment and provided its compensation package. It further prevents the employer from searching public records databases to ascertain an applicant’s salary history and requires the employer to take all reasonable measures to avoid inadvertently discovering a potential employee’s salary history. However, nothing in the law prevents job applicants from volunteering previous compensation information, at which point, public entities may verify this information.

The order only affects institutions under the direct control of the executive branch of New Jersey’s state government—i.e., those over which Murphy himself presides—as only legislative action can institute a broader prohibition. Local governments and private employers are not affected. However, Murphy said the order was his “first meaningful step towards gender equity and fighting the gender pay gap,” and that he intends to sign legislation that would ban salary histories throughout the state.

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Amazon Joins Other Tech Companies in Dumping Salary History Inquiries

Amazon Joins Other Tech Companies in Dumping Salary History Inquiries

Amazon has prohibited its hiring managers from asking job candidates in the US about their previous salaries, Caroline O’Donovan reports at BuzzFeed, citing a post on an internal company message board:

According to Amazon’s message, which was posted Tuesday, hiring managers and recruiters can no longer “directly or indirectly ask candidates about their current or prior base pay, bonus, equity compensation, variable pay, or benefits” or “use salary history information as a factor in determining whether or not to offer employment and what compensation to offer a candidates.”

The instructions also explicitly ban the use of tools like LinkedIn Recruiter to estimate or otherwise ascertain an individual’s prior salary. According to an Amazon spokesperson, these rules were shared with all Amazon recruiters in the US, and apply equally to salaried employees like software engineers and hourly workers like call center employees.

This change comes in response to a wave of state and local laws banning salary history inquiries in the hiring process, including in California, Delaware, Massachusetts and Oregon, as well as New York City. California’s salary history ban, which came into effect at the beginning of this year, could have a particularly significant impact as that state is home to many major employers, including the tech giants of Silicon Valley. Facebook and Cisco have both announced that they will stop asking about salary histories, not just in California but throughout the US, while Google has already abandoned them nationwide.

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