Pay equity is popular. Shareholder resolutions, often promoted by socially conscious investors, have challenged businesses to report their pay gap publicly. Plus, 69% of Fortune 1000 companies have voluntarily launched pay equity studies in the last two years. Push for pay transparency grows stronger.
That is laudable but the real problem is how to eradicate gender gaps that are then identified.
Issues of discrimination are not issues of plumbing where it is sufficient to identify the leak and to spend the money to make the repair. Rather, fixes pose the risk of reverse discrimination. Ricci v. DeStefano, 557 U.S. 557 (2009) – where the Supreme Court found New Haven guilty of discrimination against whites in attempting to remedy discrimination against blacks – stands as a warning beacon.
But, is reverse discrimination a genuine risk in remediating pay equity?
Although infrequent, challenges on reverse discrimination grounds have been brought by male and nonminority employees when women only received pay adjustments. Rudebusch v. Hughes, 313 F.3d 506, 523-24 (9th Cir. 2002) (permitting Title VII claims of white, male professors challenging pay equity adjustments for female and minority professors, resulting in a jury verdict for the plaintiffs); Maitland v. Univ. of Minn., 155 F.3d 1013, 1018 (8th Cir. 1998) (same, resulting in settlement); Smith v. Virginia Commonwealth Univ., 84 F.3d 672, 677 (4th Cir. 1996) (en banc) (same, resulting in settlement).
Employers must be able to show a valid reason for any pay increase in response to a wage gap. The explanation that this is affirmative action worked once: Ende v. Board of Regents of Regency Universities, 757 F.2d 176 (7th Cir, 1985). But, in a post-Ricci environment, it is a frail reed (as the contrary holdings even in the pre-Ricci cases cited above illustrate). There is no safe harbor for such quick fixes.
Yet, there are alternatives to quick fixes to consider either in isolation or collectively:
- Price the job, not the person. Employers can research to determine the fair market value of the position, which can be moved up or down based on objective criteria that would remove any unconscious bias in setting a male’s versus a female’s salary. Why Banning Questions About Salary History May Not Improve Pay Equity.
- Make pay transparent to the employees. Transparency in pay may make employees feel more comfortable about where they stand compared to their similarly situated colleagues. It may also remove the need for salary negotiations, which research has shown heavily favors men over women. 5 Ways to Fix the Gender Pay Gap.
- Ban salary negotiation. Studies posit that salary negotiation may play a prominent role in gender-based pay-disparity. Two Solutions For The Gender Pay Gap That Can Be Implemented Today.
- Stop asking for salary history. Some states now have laws prohibiting asking a candidate about salary history because that practice replicates gender inequity in the pay market. Implementing that ban nationally may not only simplify hiring practices but also reduce the risk of perpetuating disparities baked into market prices. ‘What’s your salary?’ becomes a no-no in job interviews. In addition, the Ninth Circuit has just ruled that prior salary can’t justify a gender wage gap. In Rizo v. Fresno County Office of Education, 2018 WL 1702982 (9th Cir. April 9, 2018), the Court found that an employee’s prior salary – either alone or in combination with other factors – cannot justify a pay gap between men and women. As the Court said, “Salaries speak louder than words,” and to allow salary history to be used to justify a pay gap would “perpetuate rather than eliminate the pervasive discrimination” that the Equal Pay Act was aimed to eliminate.
- Fix the gap in experience. Women (far more often than men) drop out of the workforce due to family responsibilities so that a 42 year old woman is competing with less work experience than her 42 year old twin brother. Some employers have found that increasing paid maternity reduced the rate at which new mothers quit by 50%. When Google increased paid maternity leave, the rate at which new mothers quit dropped 50%.