On July 18, House Minority Leader Nancy Pelosi and a contingent of female US Representatives announced federal legislation designed to make it easier for women to gain economic security, higher wages and additional support to care for their families, click HERE. To read more about the initiative: When Women Succeed, America Succeeds: An Economic Agenda for Women and Families, click HERE.
The topic of pay equity also surfaced recently in the wake of has Facebook’s COO Sheryl Sandberg’s book: “Lean In: Women, Work, and the Will to Lead.” Even if you’ve just caught the headlines, it is likely that you’ve asked yourself, what exactly should employers do in response to pay equity or the “Lean In” movement?
According to Sandberg: a lot. One of the key barriers identified by both Pelosi’s proposed legislation and Sandberg is the “pay gap” between women and men. The good news for employers is that fairness in pay is an area where early detection and intervention can most easily reduce or eliminate an employer’s risk.
Here’s what employers and their lawyers can do about the pay gap now:
Conducting a proactive pay equity analysis is often the first and best step employers can take to ensure fair pay and diminish legal risk.
But what should you do if you identify significant pay differences between men and women? First, resist acting before you know more. Consider if there are other factors that may not have been part of the original analysis. Does one group of production managers support a team of ten and another a team of three? Are there other material differences in scope and responsibilities that are not captured by the electronic data that fed the compensation analysis? Are revenue-generating employees paid more? Was this included in the regression analysis?
Many differences that appear unexplained upon first pass, are legitimate and non-discriminatory. Thoroughly explore these first. But what if you still cannot explain differences even after a full review? You should then consider making remedial adjustments to ensure internal fairness.
Even when you are acting proactively, it is still critical to take steps to avoid putting the company at unnecessary risk. Any analysis should be conducted with the advice of counsel and under the attorney-client privilege. Conducting a multiple regression analysis, developing the appropriate employee groupings, determining the factors that most explain pay in your workforces, adjusting the model, and interpreting the results are not for the faint of heart. You are wise to partner with experienced counsel who routinely conduct these analyses. Also, consider timing issues. Equity adjustments are usually best timed to align with the annual compensation cycle, so as to limit raising suspicion that may prompt law suits.
Now is a great time to undertake a pay assessment. Federal and state civil rights agencies have taken a renewed interest in pay equity in the last year. Both the U.S. Equal Employment Opportunity Commission (EEOC) and the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) have 2013 initiatives targeting employers with compensation disparities.
Beef up Sponsorship
Sponsorship and mentorship programs are a critical piece of the workplace fairness puzzle. As Sandberg notes in Lean In: “Both men and women with sponsors are more likely to ask for stretch assignments and pay raises than their peers of the same gender.”
As differences in rates of sponsorship can have an impact on pay, as the research Sandberg cites indicates, employers are smart to take a harder look at their sponsorship and mentorship programs to ensure that women have equal opportunities to participate and particulate at proportionate rates. Employers who fail to correct perceived or actual disparities in the availability of sponsorship opportunities for women become targets for employment discrimination litigation.
But what if you want to do more? Can you create women-only sponsorship programs? Creating sponsorship and mentorship programs that target only high-potential women can be highly effective but employers should be careful before jumping to implement these programs. Sponsorship programs aimed only at high-potential female talent should be undertaken only when the employer is correcting a “manifest imbalance” of women at the company, or at certain levels or certain departments within the company, and then only when the program is intended to be a time-limited and targeted fix.
Determining whether these requirements are met is tricky and employer-specific and best undertaken with the advice of counsel.
Create Career Jungle Gyms
Creating career on-and-off ramps and building career jungle gyms, rather than straight career ladders is another step employers can take. While employers are unlikely to face lawsuits because they maintain a traditional career-ladder approach, they are likely to miss key talent. Embracing a less linear approach to career progression – what Sandberg calls a career “jungle-gym – is likely to attract and retain important talent and, at the same time, will help narrow the pay gap between men and women. A win/win.
If you do not know where to start, survey trusted leadership in your organization. If you understand the barriers, you can work to remove them. Often small, but targeted changes can go a long way to creating an organization that fully supports the success of employees of all stripes.