We will not tolerate gender pay gaps — or pay gaps based on ethnicity, race or orientation — in our companies. - Let’s Disrupt Money
You may have seen the headlines: “Starbucks Announces 100% Pay Equity.” “American Express Declares Gender Pay Parity.” Those are just a couple of the companies recently announcing they’ve achieved “pay equity,” and “gender pay parity.”
Sounds great … but meanwhile, the call for “gender parity” at the workplace continues. What do all these terms mean — and what do they all have to do with actual equality?
Pay equity = equal pay for equal work.
“Pay equity,” aka “pay parity,” is the achievement most of these companies are announcing triumphantly. As eBay put it, when they looked at “salary, bonus and annual stock,” women make “the same the total compensation that men make in the same job and at the same grade level.”
In other words, equal pay for equal work.
(Wait, isn’t unequal pay illegal?)
Well … kind of. The federal Equal Pay Act of 1963 does make it illegal to pay a man more than a woman (or vice versa). But — and this is a BIG but — it allows differences in pay if they’re based on “seniority, merit, quantity or quality of production, or ‘any factor other than sex’” — which many people think is way too broad.
A proposed Paycheck Fairness Act could fill those holes by punishing employers who retaliate when workers share salary info, putting the burden on employers to justify when someone is paid less, and allowing workers to sue for punitive damages when wage discrimination is proved. But — another big but — it’s been introduced to Congress 11 times so far, and still isn’t law.
Meanwhile, a bunch of states and cities have additional equal pay laws, but they’re variously worded and enforced. (The American Association of University Women, which researches the pay gap, only rates 10 states as having strong protections.)
In other words ... yeah. We have a long way to go on the pay equity front.
How to stand up for pay equity
Stop asking about past salaries. This question is illegal in some places, and it perpetuates wage discrimination from job to job … which is why some individual companies (like Amazon) have also banned it.
Clearly define each job’s qualifications and pay range. Adobe had to completely reorganize its “job architecture” before being able to really see and correct its pay gaps.
Keep it up. As Starbucks puts it, pay equity requires “constant vigilance and education.”
Consider making pay data public, at least internally. It’s associated with productivity and satisfaction — and it could benefit women in particular, since we’re less likely to negotiate when conditions are ambiguous. You wouldn’t be the first: Buffer makes its salaries and its salary formula public to everyone, while Whole Foods shares salaries internally.
Individual women can:
Push back if you get the salary history question in an interview.
Suggest all of the above things companies can do to the diversity task force at your workplace (or propose a diversity task force, if there isn’t one yet).
Workplace equality is more than equal pay
Pay inequity is real across occupations, and we need to do everything we can to fix it. But that wage gap we hear about, where women make 80 cents to the dollar (and women of color well below that)? That’s not just about pay inequity.
In fact, when you compare pay for similar roles in similar companies, the gap’s much smaller. So what goes into that “80 cents to the dollar” gap? A whole lot of factors.
Some of the biggies: Women get unequal representation in management — only 6% of Fortune 500 CEOs are women, even with all the evidence that women in leadership perform better. They’re also not well represented on boards. (BTW, some people refer to equal representation in leadership as “gender parity,” not to be confused with “pay parity.”)
Another biggie: Men get 30% more promotions early in their career, setting their salary trajectories at a steeper angle from the very start. Women’s promotions, meanwhile, stall: Women’s salaries peak earlier. Equal pay for equal work is seriously just the tip of the iceberg.
What we can do to get to workplace equality
Structure performance reviews that aren’t biased against women.
Set diversity targets: As part of Accenture’s excellent overall approach to equality, they report that women are twice as likely to be on the fast track when their workplace has targets.
Also set targets for promotion and retention parity, like Intel did.
Audit how often you’re offering promotions by gender (DuPont did that and found they were making women wait longer).
Track your progress year over year, like Salesforce does.
Check out Paradigm for Parity’s detailed toolkit of recommendations for hiring and promoting more women.
Individual women can:
Suggest all of the above to a diversity task force at your job.
Talk to your representatives about paid family leave (for both parents and caregivers, who are disproportionately women). When fathers also have paid family leave, the “mommy track” might become a thing of the past.
Talk to your representatives about certain tax policies that hurt working married women.
Take the steps you can to close the achievement gap in your own career.
Do you feel you’ve been paid and promoted fairly? What have you done to move toward gender equality at work? We’re most effective when we’re sharing our experiences openly — share yours with the hashtag #DisruptMoney.
© 2020 Ellevest, Inc. All Rights Reserved.
You may or may not have noticed that we linked to Forbes.com for information about pushing back against the salary history question in interviews. FYI, Forbes (“Solicitor”) serves as a solicitor for Ellevest, Inc. (“Ellevest”). Solicitor will receive compensation for referring you to Ellevest. Compensation to the Solicitor will be $20 per membership activated. You will not be charged any fee or incur any additional costs for being referred to Ellevest by the Solicitor. The Solicitor may promote and/or may advertise Ellevest’s investment adviser services. Ellevest and the Solicitor are not under common ownership or otherwise related entities.
You may or may not have noticed that we linked to https://businessinsider.com/ for information why asking for past salary does not help tighten the workplace gender equality gap. FYI, Business Insider, Inc (“Solicitor”) serves as a solicitor for Ellevest, Inc. (“Ellevest”). Solicitor will receive compensation for referring you to Ellevest. Compensation to the Solicitor will be $10 per membership activated. You will not be charged any fee or incur any additional costs for being referred to Ellevest by the Solicitor. The Solicitor may promote and/or may advertise Ellevest’s investment adviser services. Ellevest and the Solicitor are not under common ownership or otherwise related entities.
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