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Employers must reassess employee salaries for gender bias

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Employers must reassess employee salaries for gender bias

NEW YORK — Employers should proactively examine their employee salary and hiring practices to ensure they are not paying their female employees less than their male counterparts and make any necessary adjustments, particularly because they could be liable for wage disparities, experts say.

Wage disparity remains an issue despite efforts to address the problem with women making 80 cents on the dollar compared with men, which amounts to an annual gender wage gap of about $10,500, Kristine Meuse, a Dallas-based executive vice president and head of risk management for USI Insurance Services L.L.C., formerly with Wells Fargo Insurance Services USA Inc., and a 2015 Women to Watch honoree, said at Business Insurance’s 2017 Women to Watch awards ceremony in New York on Friday.

While “very little” has changed, as the gender pay gap has only shrunk from 77 cents on the dollar, the tight labor market has helped create the business case for equitable pay for women to retain them in the workforce, said Evelyn Murphy, founder and president of the Wage Project Inc. in Boston.

“Sometimes women, we are our own worst enemies,” said Caryn Siebert, vice president of carrier practice with Gallagher Bassett Services Inc. in Orange County, California, and a 2010 Women to Watch honoree. “We underestimate our value in the marketplace. I think that is part of the cause and effect.”

Employers are starting to contend with a wave of laws around the country forbidding them from asking job applicants about past salary history that are motivated by concerns that women have suffered from pay disparities compared with men that self-perpetuate as they move from job to job and report their salary histories. These laws are intended to rectify the situation by paying them equitably, experts say.

Jurisdictions that have passed salary history laws include California, Delaware, Puerto Rico, San Francisco and New York City. However, legislatures in New Jersey and Illinois passed laws that were vetoed by their governors.

“Any employer who deals with hiring across state boundaries or city boundaries has to see that this is going to become a law and anticipate how to get this right,” Ms. Murphy said. “I think the movement is here, and wise employers will try to get ahead of this because it will backfire if they don’t.”

Massachusetts became the first jurisdiction to pass such a bill in August 2016; it will take effect in July 2018.

“What we wanted to give the employers was time to make the adjustments,” Ms. Murphy said, adding that the law bans any employer from asking about salary in a job interview. “If women are being paid less at one job, you can carry that salary history on to the next job.”

The law also has a transparency clause that bans employers from retaliating if employees are discussing salary in the workplace, she said.

“For many companies it’s sort of a no-no, an unwritten rule, that you just don’t discuss your salary,” Ms. Murphy said.

The law also includes an affirmative defense for employers, meaning if employers have reviewed their employee salaries and are acting to narrow pay discrepancies, they have a defense in litigation, she said.

Philadelphia has also approved a law, but its implementation has been stayed pending the outcome of a lawsuit filed by the local Chamber of Commerce.

“I think these are really business objections masquerading as legal objections” because those opposing the bill are citing the First Amendment, arguing employers have First Amendment rights to ask these questions; and due process, meaning prospective employees can affirmatively disclose their salaries, said Gaetan Alfano, a partner with Pietragallo Gordon Alfano Bosick & Raspanti L.L.P. in Philadelphia.

Employers should proactively think about what the position involves, what a fair salary would be for the position and whether the applicant has the right qualifications for the job, he said.

“If you don’t get it right at the front end, you’re paying for it at the back end,” Mr. Alfano said. “My advice is always look at your policies, look at your hiring practices, don’t be lazy about it, try to get it right at the front end, and instill some fairness in the process once you hire people so that you’re moving forward based on performance and not based on a salary that was artificially depressed because of the salary that they came into the organization with.” 

 

 

 

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