For Women, The Pay Gap Can Be Scary
While I’d like to figure out a clever costume to be a “Pay Gap” for Halloween, instead, I’ll provide some sobering statistics:
According to recent research by the Pew Research Center, a pay gap between what men and women earn persist, unchanged, for the past twenty years. Today, in 2022, women make 82 cents for every dollar a man makes; while in 2020, women earned 80 cents to a man’s dollar.
A 2 percent increase does not mean we are closing the gender wage gap.
The pay differential is worse for Black and Hispanic women. In 2022, Pew tells us that Black women earned 70% as much as White men, and Hispanic women earned only 65% as much.
The National Women’s Law Center shows that the pay gap is even worse for working mothers regardless of their level of education. Check this out:
U.S. working moms are paid $0.58 for every dollar paid to dads.
For mothers working full-time year-round, this equals a loss of roughly $17,000 annually, with mothers of color losing even more, according to the National Women’s Law Center.
Men who become parents receive a 6% salary increase while women make 4% less for every child they have.
Wait, what?
Doesn’t A Pay Differential Violate Federal Law?
Well, sure. The Equal Pay Act of 1963 (“EPA”) prohibits sex-based wage differentials for work requiring equal skill, effort, and responsibility performed under the same or similar working conditions. Title VII of the Civil Rights Act of 1964 (Title VII) does too.
These laws differ in important ways.
To make out a prima facie case for unequal pay under the EPA, an employee must show that the skill, effort, and responsibility required in her job responsibilities are equal to those of a higher-paid male employee. The work does not need to be identical, just substantially similar, which is, as so many things are in the law, determined on a case by case basis.
By contrast, Title VII does not require that two jobs be substantially equal. Instead, Title VII contemplates comparisons between the compensation rates of “similarly situated employees,” which is a far lower standard than the EPA.
The EPA prohibits sex-based pay discrimination and retaliation only.
Title VII covers sex-based pay discrimination and retaliation too while also prohibiting discrimination based on race, color, religion, and national origin.
Aren’t There Pay State Transparency Laws?
Yep. So many. And, like paid sick leave laws, more and more states continue to enact pay transparency laws.
And New York’s pay transparency law, newly effective in September 2023, is one of the most aggressive.
As of September 17, 2023, most Big Apple employers (those with 4+ employees) must include the minimum and maximum pay range that the employer reasonably or in “good faith” expects to pay when they advertise (internally or externally) a job, promotion, or a transfer opportunity. Any such advertisement must include a written job description.
Moreover, the law applies to jobs that will physically be performed, at least in part, in New York OR outside of the state, but report to a supervisor, office, or other work site in New York.
New York City’s law requires a good faith pay range in all job advertisements, too, if the job can or will be performed in New York City.
Other states boast similar laws including Maryland, Massachusetts, California, New Hampshire, Nevada, and more. They include different penalties and procedures for enforcement.
Employer Best Practices
Employers, especially multi-state employers who employ workers in more than one state, have a lot to consider
Employers should audit their pay practices and compensation data to ensure they are paying employees equal pay for equal work. If you have employees in the same position earning different salaries, you may need to increase the compensation of the lower paid worker.
Be transparent about employee pay, and know the law in the state(s) in which you have employees: California, Colorado, New York and Washington all have pay transparency laws on their books, and Kentucky, Massachusetts, Missouri and South Carolina have introduced pay transparency legislation that may result in additional obligations for employers.
Audit job postings to ensure they are accurate and up to date.
Document positions, job titles, responsibilities for jobs, and salaries to comply with many state laws requirements that companies maintain records of and/or report on historical salaries for various positions. This does more than legal compliance – it ensures consistency and keeps employers accountable for unexplained or unwarranted wage differentials.
Employers, these laws are aimed at closing the gender pay gap. Providing employees with information and promoting transparency promotes fairness and contributes to closing the gender pay gap.
Employers should aim to be part of the solution to this sex-based differential and not part of the problem.