The gender pay gap is a major problem in the United States. Even companies with a progressive reputation have come under scrutiny recently.
Last Friday, San Francisco Judge Steven Berlin issued a ruling that Google must provide contact information for up to 8,000 employees so the Labor Department can investigate if women and men are paid fairly for equal work. The tech behemoth denies allegations there are salary disparities between genders. When the investigators explore the data, will the numbers match the claims?
Full-time working women continue to earn less than men nationwide — an estimated 79 cents for every dollar a man earns when working full time. This problem isn’t unique to the U.S.; cross the pond and problems persist. Just look at the recently released info from the BBC about how much it pays entertainment stars and top journalists. As CNN reports, “The data, which was being published for the first time, betrayed an embarrassing fact: It’s paying its female stars a lot less.”
There’s clearly a problem, and some state governments have taken steps to promote pay equality from the get-go. In 2016, Massachusetts became the first state to pass legislation that made it illegal for employers to inquire about applicants’ salaries prior to making a job offer. In May of this year, New York City did the same, prohibiting city employers from inquiring about salary history. That bill will take effect Oct. 31, 2017.
Pay equality is the main motivation for both these laws. The NYC legislation states, “When employers rely on salary histories to determine compensation, they perpetuate the gender wage gap. Adopting measures like this bill can reduce the likelihood that women will be prejudiced by prior salary levels and help break the cycle of gender pay inequity.”
This is a great step in closing the pay gap, but companies need to do so much more to continue the forward momentum. It’s a complex issue and certainly not a problem that will be solved overnight. But we can’t live in denial that it exists, and companies must take clear action in order to identify problems and overcome them.
Many employers are blissfully unaware they’re guilty of gender pay discrimination. That can come back to bite them. First, HR and finance should work together to look at what employees are paid and to make sure numbers are balanced. Ideally, a pay audit like this should be done annually.
Next, for SMBs, it can be difficult to do apples-to-apples comparisons internally. External numbers can really lend insight into the local marketplace. Conduct analysis based on gender, job title, experience and responsibilities to see how your employees are being paid compared to others in the area. Consider subscribing to compensation software from companies like PayScale to ensure you get accurate data.
Finally, take steps for the future. Adjust discrepancies you discover and make fair offers during hiring negotiations. For current employees, ensure women have equal opportunity for advancement. Finally, keep an open-door policy. If an employee wants to discuss pay and other opportunities, make it a priority to have a thoughtful conversation. Addressing concerns head-on and taking action makes a huge difference.