California Bill Would Require Large Companies to Report Gender Pay Gaps

California Bill Would Require Large Companies to Report Gender Pay Gaps

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.”

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Fed Study: Discrimination Is Causing Growth in the US Racial Pay Gap

Fed Study: Discrimination Is Causing Growth in the US Racial Pay Gap

Last year, an alarming report from the left-leaning Economic Policy Institute found that the gap in income between black and white Americans had grown from 1979 to 2015, with black men earning 22.0 percent less, and black women making 34.2 percent less, than white men with the same education, experience, and geographical location. A new study by the Federal Reserve Bank of San Francisco confirms that finding, showing that the black-white wage gap has been growing and furthermore, that economic factors do not explain why.

The hourly wage ratio of the average black male to his white male counterpart shrank from 80 percent in 1979 to 70 percent in 2016, the San Francisco Fed finds. Black women earned 95 percent of what white women made in 1979, but that has gone down to 82 percent in 2016. While some of the gap can be explained by attributes such as location, education, working hours, job type, etc., the reason for its growth is less tied to those factors and economists are struggling to explain the increase. The Fed says this “implies that factors that are harder to measure—such as discrimination, differences in school quality, or differences in career opportunities—are likely to be playing a role in the persistence and widening of these gaps over time.” Eshe Nelson at Quartz adds:

In fact, additional research by the San Francisco Fed showed that black people with bachelor’s degrees saw the earnings gap with their white counterparts increase by more than for high-school graduates. … Ultimately, it seems that discrimination—whether in the “unexplained” category, or more structural racial bias that exists in educational systems and elsewhere—is widening the disparity in wages between black and white workers. Time alone will not close this gap, researchers conclude. … time seems to be making it worse.

One factor that may also account for the recent rise is that black workers are hit harder by recessions and recover more slowly than the rest of the labor market. It’s very likely that the cumulative effect of the recessions of 1987 and the late 2000s reversed, or even worsened, any progress made from the late 1960s to the early 80s. Bloomberg’s Jeanna Smialek and Jordyn Holman idenfity why this is such a problem:

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Former Employees Sue Google, Alleging Gender Discrimination

Former Employees Sue Google, Alleging Gender Discrimination

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.

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BBC Announces Independent Audit to Tackle Gender Pay Gap

BBC Announces Independent Audit to Tackle Gender Pay Gap

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:

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Illinois Governor Vetoes Ban on Salary History Inquiries

Illinois Governor Vetoes Ban on Salary History Inquiries

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:

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Trump Administration to Halt Pay Data Reporting Rule

Trump Administration to Halt Pay Data Reporting Rule

The White House is putting the brakes on 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. The previous administration said the rule, which was to become effective next spring, would help the EEOC identify gender and racial pay discrimination, but according to the Wall Street Journal, the Trump administration disagrees:

“It’s enormously burdensome,” said Neomi Rao, administrator of the Office of Information and Regulatory Affairs, which analyzes the cost of federal rules and regulations. “We don’t believe it would actually help us gather information about wage and employment discrimination.”

When President Trump took office in January, his administration was expected to reverse many Obama-era policies created through executive action that were considered unfriendly or overly burdensome to employers, including the pay gap reporting rule. As recently as early August, employers were unsure whether to proceed in preparing to comply with this rule, but now, at least for the time being, the law will not go into effect. The Journal reports that in a memo sent to Victoria Lipnic, the acting chairwoman of the EEOC, on Tuesday, Rao said the White House Office of Management and Budget would stay the rule pending a review, as the administration believes it violates federal laws intended to reduce excessive paperwork.

Class Action Suit Forming Over Pay Discrimination at Google

Class Action Suit Forming Over Pay Discrimination at Google

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.”