The Problem With Existing Pay Equity Laws
Katica Roy
CEO of Pipeline Equity | Gender Economist | 2020 Colorado Entrepreneur of the Year | Fast Company Impact Council Member | Contributor for Bloomberg, Fast Company, Fortune, WEF & NBC
Welcome to my weekly Q&A roundup. (Scroll down to find the Q&A.)?
If this is your first time here, welcome. I spend a fair amount of time speaking at events and conferences. At the end of my presentations, I leave space for audience members to ask questions—tough questions, brave questions, you name it. The level of candor and curiosity always inspires me, and I want to share that sentiment with you. So each week, I pick one question that I believe others would find most instructive and publish my response to it here.?
The purpose of this weekly tradition is transparency and inclusivity.?
- Transparency: a behind-the-scenes look at my day-to-day.?
- Inclusivity: bringing others along in the journey.
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Today’s Pay Equity Laws Don’t Go Far Enough??
Question:?
If gender pay discrimination is such a big problem, why don’t more women sue their employers under the Equal Pay Act or Civil Rights Act?
Answer:
Simple. Because it’s not that simple. (And as you’ll soon understand, there’s a better way to solve this problem than retrofitting pay equity with the judicial system.) To understand why this is, we need to deconstruct what it means for an employee to take their employer to court for pay inequity.?
领英推è
The Equal Pay Act and The Civil Rights Act
First, you mentioned two key pieces of legislation: the Equal Pay Act (EPA) and the Civil Rights Act. The EPA prohibits pay discrimination on the basis of sex. It’s a US federal law under the purview of the Equal Employment Opportunity Commission. It’s been on the books since 1963.?
The Civil Rights Act, specifically Title VII, takes a broader approach than the EPA by prohibiting not only pay discrimination, but also other forms of employment discrimination such as hiring and firing on the basis of sex, race, color, religion, and national origin. This one’s been on the books since 1964.
Plenty has changed since these laws came into existence six decades ago. But one thing that hasn’t changed is the precursor to any pay inequity lawsuit. What’s the precursor??It’s knowing you’re not receiving the wages you deserve.?
How Information Asymmetry Impacts Pay Equity
Step one to file for pay inequity: you must first know that you’re not being paid fairly. It implies information symmetry, a relatively novel development in a world of information asymmetry. (In this case, information asymmetry = pay secrecy.)
Today, despite the proliferation of pay transparency laws, nearly half of all employees in the US work under some degree of pay secrecy. This includes formal and informal pay secrecy policies, such as when companies discourage workers from discussing their salaries with other employees or on online forums.?
Perhaps not surprisingly, more women (52.2%) than men (46.8%) work under pay opacity, and more women (15.7%) than men (10.9%) work for employers who have formally banned pay discussions.??
Assuming you have identified a discrepancy between the wages you earn and the wages you believe you deserve, you next have to allocate time and money to actually file a claim.?
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CEO at Womens Voices Leading
3 å¹´This is one of the top battles women and employers should take on. As you mention in your article, pay secrecy is a hurdle as many employers are able to hide behind this lack of information. Perhaps the public sector employers should be leading this cause. Public sector pay scales and salaries are public on each agency's website. The ideology that the Library Director or Community Services Director should be paid less than the Community Development Director or Finance Director should have been unsubscribed to long ago. Men and women have historically held these positions because of the gender stereotypes that were in play. Now we are seeing female Fire and Police Chiefs and Public Works Directors. So even though the public sector typically pays less than the private sector they can still lead this charge by correcting the inequities that have been longstanding. In turn this can create pressure on wages and markets that does affect private sector wages. The organizations that conducted classification and compensation surveys should also become better informed on this issue and take the lead to correct disparities in wages for traditional female classifications. Why you may ask? Because it affects every woman in your life.