Wage discrimination has been illegal since 1962. However, employment lawyer and industry analyst Heather Bussing argues that legislation alone has not eliminated it: “The law is not enough.”
In Start with the money: pay equity as the foundation of fairnessBussing’s Women in Tech session at HR Tech, she pointed to a March 2024 report from the Economic Policy Institute that reveals there has been little meaningful progress in closing the pay gap over the past 30 years.
The report shows that while the gap narrowed between 1979 and 1994, this was mainly due to stagnant wages for men rather than substantial increases in wages for women. Since then, the gap has remained largely unchanged.
Pay Equity: Money and Math
Bussing explained that women, especially those who have or may have children, often suffer from wage discrimination. “We’re not going to change the fact that women have children,” Bussing said. However, employers must “make it possible for women to work and succeed.”
However, rather than focusing solely on the root causes (such as parenting), employers should prioritize addressing the outcome: the pay gap, which is easy to identify. “It comes down to money and math, and organizations are great at that — that’s their specialty,” Bussing said.
She added that the solution to pay equity is not to change the attitude of leaders, but to pay employees equally for equal work. “It’s not complicated,” she emphasized. Bussing also pointed out that according to the EEOC, wage discrimination – at its core – is just discrimination.
Under the federal Equal Pay Act, employers who willfully violate the law can face fines of up to $10,000. While payments to affected employees can add up, fixing the problem itself isn’t that expensive, Bussing said. However, some HR leaders aren’t sure how to proceed.
How to get pay equity right
In July, Bussing published a book on the subject called Get Pay Fair: How to Get Pay Equity That Works. She pointed out a piece of advice contained within its pages. “My fellow author, Ken Plunkett, the CEO of salary.com, has a brilliant suggestion, which is to figure out how big your problem is and then allocate 10% to 20% of your bonus pool,” he said Bussing. This margin can then be used to boost wages for employees who are unequally paid. She said that after several years of progress in this area, organizations will achieve internal pay equity, and this will begin to influence the market.
Organizations must accurately compare the work performed by employees, Bussing explained. HR leaders cannot determine whether people are being paid equally without first understanding whether their work is truly comparable.
To achieve this, skills, quality of work and responsibility must be assessed. However, Bussing noted that many organizations rely on tools like organizational charts, assuming they reflect accountability. Some also use job titles as shorthand, but job titles often reflect salary, not the actual work performed. “It’s a good starting point, but you can’t stop there. Otherwise, you’re just comparing pay to pay, not work,” Bussing said, likening the issue to a “self-licking ice cream cone.”
Bussing also stressed the importance of well-crafted job descriptions – not just job descriptions, but ones that align across roles, allowing HR leaders to accurately compare skills, effort and responsibility. According to Bussing, HR and the technology industry are actively working to improve this process with a focus on skills and equity.
Increased enforcement is on the horizon
“I don’t think the world is against women or black people or anyone else, but there are things we need to learn and figure out to make workplaces more inclusive,” Bussing said. She stressed that organizations need to address these issues – not just because it’s a good idea, but because it’s the law. Bussing emphasized increased pay equity enforcement, particularly with pay transparency regulations. For example, 19 states have passed laws requiring organizations to disclose salaries.
A recent study by Willis Towers Watson showed that 75% of organizations surveyed now publish salary, which is a significant development. “These pay equity laws started to pass between 2020 and 2023, so we’ve seen substantial progress in a short period of time,” Bussing noted.
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