Why Won’t Men Pay Women More?

Unequal pay is an important concern for women in the workplace. According to a Pew Research survey, working women report that that equal pay is the top issue for them.  Although under the Obama administration significant progress was made in enacting policies and legislation to level the playing field, much of this advancement has already been reversed under Trump.  For example, the Trump administration recently ended a modest attempt to close the gender wage gap when it rescinded a policy from the Obama administration that had not yet gone into effect which simply required businesses to report employees’ pay by gender and race.

The Statistics Don’t Lie

Overall, women in the U.S. are paid an average of 79 cents for every $1 paid to men.  Gender pay disparity varies greatly from state to state.   Women in Connecticut fare slightly better than the national average, earning 83 cents for every $1 men earn.  These statistics are even lower for African-American and Latin American women in comparison with men.

Current Equal Pay Laws

The Equal Pay Act (EPA) of 1963 prohibits discrimination in pay on the basis of gender.  The laws against pay discrimination cover all forms of compensation, including salary, overtime pay, bonuses, stock options, profit sharing and bonus plans, life insurance, vacation and holiday pay, cleaning or gasoline allowances, hotel accommodations, reimbursement for travel expenses, and benefits.

A Connecticut bill that was passed earlier this year and went into effect on October 1st strengthens the requirement that employers provide “comparable” pay for workers performing similar duties.  In addition, the bill protects employees from losing seniority based on time spent on maternity or other family or medical leave.  However, unlike similar bills passed in Massachusetts, and in the cities of New York and Philadelphia, Connecticut’s gender equity bill stops short of prohibiting an employer from inquiring into a prospective employee’s salary history.  In its original form, the bill would have banned an employer from asking a prospective employee about wage history.  This provision was contested by several Republican members of the state House and Senate until it was ultimately removed.

Federal law affords more protection to employees from having to provide information to potential employers about their past wage histories.  The Equal Employment Opportunity Commission (EEOC) takes the position that prior salary alone is an inherently sex-based consideration. This perspective essentially assumes that because women have been subjected to unlawful pay discrimination by prior employers, it is unfair for an employer to use past salary history alone to determine an employee’s pay rate.

Businesses Are Not Doing Enough

Overall, American businesses have done little proactively to ensure that men and women are paid equally.  In 2017, even with the continuous growth of the country’s largest technology leaders, most have shown little progress in their efforts to level the playing field for women, who are underrepresented in key engineering and leadership roles and are paid less than men.

In recent months, several well-known technology and financial firms have come under fire for systematic gender pay disparity.  Google, for example, has come under investigation by the Labor Department and has faced criticism from investors and some of its own employees over differences in how women and men are paid.  While Google has vehemently denied that its salaries are discriminatory, it is currently facing a class action lawsuit in which 60 women have alleged that there are clear disparities and prejudices in the way the company determines the salaries, bonuses and stock options of women as opposed to men.  The claims against Google hinge on the way that women are channeled to levels and positions that pay less than men with similar education, qualifications and experience.

The financial services giant State Street Corp. has also faced recent allegations that it paid female executives less than men.  The DOL’s Office of Federal Contract Compliance Programs determined that since 2010, State Street has paid women in senior vice president, vice president, and managing director positions less in base salaries, bonus pay, and total compensation annually than similarly situated men in those positions.   State Street Corp. denied those claims, but agreed to pay $5 million resolve the matter.

Pay Disparity is also Complicated by Fear

The issue of gender pay disparity is more complicated than simply ensuring that companies pay women the same salaries as they do men.  With the wave of highly publicized sexual harassment scandals, men report that they have become more cautious in their interactions with women at work, for fear that a single misstep could result in an accusation that would end their careers.  This ultimately ends up depriving women of the kind of workplace camaraderie that leads to career advancement.  According to research, building genuine relationships with senior coworkers is one of the most important contributors to pay raises and promotions.  When women are not afforded the same opportunities to build these types of relationships, their careers are more likely to stall at lower levels of company hierarchy.

Companies can encourage these relationships by hiring more women in top positions. According to research, women in companies with many female executives were more likely to say that male-female work relationships had never been an issue for them.

Combating Gender Pay Disparity

To combat gender pay disparity directly, there are several steps an employer can take including conducting equal pay audits with transparent results and methodology, increasing transparency about pay, banning the use of salary history and negotiation to set compensation, and moving towards clearer compensation metrics for staff. For example, the tech start-up Buffer conducted a pay data analysis in 2016 which revealed that men’s salaries averaged almost ten thousand dollars more than women’s salaries. In order to address its wage gap, Buffer began examining its process for determining how employees are placed at particular experience levels, which determines compensation, and hiring more women to address the gender imbalance in its workforce.

Studies have shown that openness around compensation can increase the likelihood that employees believe they are paid fairly.  Because a culture of secrecy around pay can provide cover to discrimination, many employers have been moving towards more transparent pay practices.  Some companies have made the salaries of all staff available to their employees. By doing this, employees can compare their salaries to coworkers in the same position.

Other employers have initiated policies to standardize compensation-setting, eliminating the need for salary negotiation. This has the effect of minimizing the role of bias and discretion when determining compensation.

Although there are many tools at the disposal of an employer trying to correct the gender pay gap, many companies continue to promote policies which result in higher pay for men than for women. But proving that you have been paid less because of your gender is often a difficult task.

Bringing Pay Disparity Claims

To bring a claim under the EPA as a female employee, you must show that a man working at the same place and doing the substantially the same job (equal work) is paid more than you are paid.  Your jobs not have to be identical, but must be substantially the same.  What’s important is the actual work being done, not the job titles or descriptions.  Under the EPA, two jobs are considered equal when they require the same basic level of skill, effort, and responsibility, and are performed under similar working conditions.

Once you have shown a court that you were subject to gender pay inequity, your employer must provide some evidence that it had a legitimate, nondiscriminatory motive for its decision.  Employers have a great deal of latitude in justifying a decision to pay one employee less than another.  Under the EPA, your employer can justify a pay differential by proving it is the result of a seniority system, a merit system, a system which measures quantity or quality of work, or any reason other than gender.  Your employer will likely claim that that a man who is paid more than you are is in some way more qualified.

Finally, you will have an opportunity to show that the employer’s stated reason is a mere pretext, intended to cover its true discriminatory intent.  This is where a documented history of your manager’s sexist comments or history of promoting only men may be invaluable, particularly if you can show that equally or better qualified female employees were turned down.

Remedies available to victims of pay discrimination may include; back pay, hiring, promotion, reinstatement, front pay, compensatory damages (emotional pain and suffering), punitive damages (damages to punish the employer), other actions that will make an individual “whole” (in the condition he or she would have been but for the discrimination).  Your employer also may be required to take corrective or preventive actions and to minimize the chance it will happen again, as well as discontinue the specific discriminatory practices involved in the case.

It is unlawful to retaliate against an individual for opposing employment practices that discriminate based on compensation or for filing a discrimination charge, testifying, or participating in any way in an investigation, proceeding, or litigation under the Equal Pay Act.  If your employer fires you, or takes any other adverse action against you for reporting a pay disparity, it may be subject to a charge of retaliation.

If you think that you have been a victim of gender pay discrimination, seek the advice of an employment attorney.  A qualified lawyer will be able to talk you through the steps of preparing a claim to file with the Equal Employment Opportunity Commission and your state’s counterpart.  Filing with these agencies is a prerequisite to filing a lawsuit in court, and you may be able to resolve your claims prior to litigation.  You can find out more about the process for filing an EEOC claim at https://www.eeoc.gov/employees/charge.cfm. Please contact one of our employment attorneys at Mark P. Carey, P.C. to resolve your equal pay claim.

By Jill Saluck