As CFO, you should be aware of research related to the wage gap between men and women and how your organization measures up with existing pay equity laws, including the Equal Pay Act of 1963 requiring men and women in the same workplace get equal pay for equal work.
According to some studies, women working full-time earn an average of 78 cents to every dollar earned by men. This gap persists regardless of industry, according to the National Partnership for Women and Families. It also exists regardless of education level. The pay gap varies widely across states, from as low as 9 percent in District of Columbia to as high as 34 percent in Louisiana.
Lawmakers are tackling this on the federal and state level. Most recently, the proposed Paycheck Fairness Act would call for changes to the Equal Pay Act that further penalize employers when they have gender-based pay discrepancies, prevent organizations from legally pursuing employees who share wage information and allow for employers to be party to civil lawsuits for damages as necessary. This year, equal pay bills were introduced or pending in 34 states, according to the The American Association of University Women.
On August 1, 2016, Massachusetts Governor Charlie Baker signed into law a comprehensive pay equity bill entitled The Act to Establish Pay Equity. The Act will beome effective on July 1, 2018, so employers will have time to check their pay practices and make necessary changes to comply with the Act. Massachusetts businesses will be required to pay employees the same wage for the same or comparable positions regardless of gender. Comparable work requires "substantially similar skill, effort and responsibility."
2. New York
Gov. Andrew Cuomo signed legislation eliminating a loophole that allowed employers to prohibit employees from discussing salaries, per the Office of the Governor. The bill increased damages available to an employee if an employer "willfully violates the law."
The California Fair Pay Act broadens an existing prohibition on paying women less than men by saying bosses can't pay employees less for substantially similar work, even if their titles are different, according to California Legislative Information.
Maryland's governor signed the Equal Pay for Equal Work Act that includes features such as gender identity and "work of comparable character," according to the Maryland General Assembly.
As CFO, one step to consider is a policy of salary transparency. Though hardly an answer to all gender wage gaps — and sometimes an agent for troubled workplace conversations — open salaries puts numbers in the light. Organizations such as Whole Foods and Buffer opened up salary figures to all workers — and, in Buffer's case, to the public as well, according to the Wall Street Journal.
Harvard Business Review says to encourage women to seek opportunities for additional responsibilities and insist on a contract clause that calibrates raises to the increases paid to men of comparable rank and in comparable firms. Other tactics include encouraging employees of all genders to feel comfortable discussing pay with co-workers, and offering advice and guidance to female employees about how to sharpen negotiation skills and speak out.
CFOs should be aware of the trend of increasing equal pay laws and know how their organization measures up. Looking at pay gaps, if any, and seeing if differences can be justified or explained, should be a critical component of your HCM strategy.
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