10 Steps Toward Equal Pay: A Call to Action for the Biden Administration

March 24 will mark another Equal Pay Day, which signifies how far into the year women must work to earn what men earned in the previous year. Pay gaps for women of color are even greater. Without decisive action, these persistent pay gaps will not close for decades. To move the dial on equal pay, the Biden Administration should take these critical steps:  

1. Support passage of the Paycheck Fairness Act.

Passage of the Paycheck Fairness Act, which was first introduced in 2014, is long overdue. This legislation would prohibit retaliation against employees who discuss pay with coworkers and eliminate the perpetuation of pay discrimination caused by employers’ consideration of prior salary. The law would make it easier to challenge systemic pay discrimination through class action lawsuits, require legitimate, job-related reasons for pay disparities, and provide the same remedies that are available to employees who file similar civil rights claims.

 2. Reinstitute the collection and analysis of pay data.

The Equal Employment Opportunity Commission (EEOC) should reinstitute pay data collection in line with revisions made to the EEO-1 Survey during the Obama Administration. Pay data should be used to identify significant problems and target enforcement efforts, considering specific challenges and different approaches in particular industries. Aggregate pay data should be published, in keeping with existing practices to identify trends within industries and for particular demographics.

3. Ensure equal pay in federal contracting.

The Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) should take critical steps to ensure equal pay by federal contractors. OFCCP could issue executive orders or initiate rulemaking to promote equal pay in a variety of ways. OFCCP could require federal contractors to include compensation analyses in affirmative action plans, publish pay ranges on job postings, include an equal pay certification in affirmative action plans, or make public disclosures about aggregate pay information. Contractors also could be prohibited from considering salary history in setting pay.

4. Require public companies to disclose gender and race pay ratios.

The Securities and Exchange Commission (SEC) can build in sunlight by requiring public companies to disclose gender and race pay ratios and other compensation data on an annual basis. The SEC already requires many publicly held large companies to report on the pay ratio between the CEO’s annual earnings and the median annual compensation for all employees. Such disclosures would empower investors and customers to make informed choices about where to spend their money. The SEC also could provide guidance to companies regarding voluntary reporting on pay equity to investors.

5. Promote best practices and compliance with employers. 

Private sector employers play a critical role in reducing the pay gap, and there are many ways that they can and should take action to ensure equal pay. The Administration should work with high road employers to promote best practices, building on commitments made by employers that signed the Equal Pay Pledge during the Obama Administration. The Equal Pay Pledge includes a commitment to  conducting an annual company-wide gender pay analysis across occupations; reviewing hiring and promotion processes and procedures to reduce unconscious bias and structural barriers; embedding equal pay efforts into broader enterprise-wide equity initiatives; and pledging to take these steps as well as identify and promote other best practices that will close the national wage gap to ensure fundamental fairness for all workers.

The Administration should re-engage with Employers for Pay Equity, a consortium of nearly 40 leading employers committed to collaborating to eliminate the national pay and leadership gaps. These employers come together to share best practices in compensation, hiring, promotion, and career development as well as develop strategies to support other companies’ efforts in this regard.  

6. Conduct outreach to human resources organizations, job search websites, shareholders, and investment firms.

The Administration also should engage with management-side organizations like the Society for Human Resource Management and job search websites like Indeed, LinkedIn, Glassdoor, CareerBuilder, Monster, Google for Jobs, etc. Many of these organizations are taking action on pay equity. This collaboration could promote best practices such as encouraging employers to publish pay ranges, discouraging employers from requesting pay history information, and minimizing discrimination in salary negotiation.

Shareholders also have mounted efforts to request public companies to report the median gender pay gap, equal pay policies, and reputational, competitive, and operational risks, including risks related to recruiting and retaining female talent. Shareholder resolutions have helped to promote pay equity in many sectors and leading corporations. 

7. Reinstitute an equal pay task force to ensure coordination and enforcement of the law.

The Administration should ensure interagency coordination by reconstituting an equal pay task force, including the EEOC, the Department of Labor, the Department of Justice, the Office of Personnel Management, the Government and Accountability Office, and the Securities Exchange Commission. Interagency coordination on outreach, education, and enforcement efforts will maximize the effectiveness of existing authorities. The task force should meet regularly and establish a detailed strategic plan with accountability measures to adhere to established timetables and deadlines for implementation. Each member agency should convene internal working groups focused on promoting equal pay through outreach, education, and enforcement.

8. Ensure that the federal government leads the way as a model employer.

The federal government wields tremendous influence as the employer of millions of workers across the country. The Administration should continue to study causes of the pay gap in the federal workforce, including the impact on women of color, as well as pay gaps within different agencies, industries, and types of jobs. The Administration should identify problematic practices that perpetuate pay discrimination, such as use of prior salary in requesting an exemption to the usual starting salary. The Administration should also implement promising practices that combat pay discrimination. Cutting edge innovations in the private sector should be adopted in the public sector. The Administration should consider implementing bold changes.

9. Reinstate the protections that were provided by the Fair Pay and Safe Workplaces Executive Order.

The Fair Pay and Safe Workplaces Executive Order was rescinded by the Trump Administration and has since rolled into the Fair Pay and Safe Workplaces Act of 2020, which would require prospective federal contractors to disclose labor law violations and give agencies guidance on how to consider labor violations when awarding federal contracts.

10. Issue reports from the National Council of Economic Advisers

Issues of gender and racial equity should be a focus of the Council of Economic Advisers. The Council should issue briefs and reports about trends, causes, and effects of the pay gap, as the Council did during the Obama administration.

Working IDEAL provides trusted and innovative advice on inclusive workplaces, diverse talent, and fair pay. Our audits and assessments apply the best thinking on how to promote gender, race and other forms of equity in your pay practices. Our robust quantitative and qualitative reviews go beyond basic compliance to align effective compensation strategy with mission and values. Contact us to learn more about the services we offer.

Author: Sarah Crawford

Best Practices to Increase Engagement, Productivity, Retention, and Innovation | Excerpts from Diversity, Inc.

It’s been over a year since noted journalist and scholar Pamela Newkirk published Diversity, Inc., an essential account of the promises many companies made to strengthen diversity, equity and inclusion, the billions spent on programs and initiatives over five decades, and the huge gap that still remains in fulfilling those promises. This acclaimed book, which Time Magazine declared a “must-read”, is a deep study of how the most popular responses to calls for justice and equity at work have not only failed to make progress, but even led to declining numbers of Black leaders in Corporate America, a continued racial wealth gap and pay gap, and persistent discrimination in the workplace. Her book also highlights the rare examples of successful progress and the lessons from social science about what actually works to move the needle on workplace equality. 

In the wake of George Floyd’s murder last summer, companies again, as they have many times in the past, made statements and pledges to do more. While some of the responses are more symbolic, others have greater potential for meaningful impact – from shifts in corporate giving and community support to belatedly addressing longstanding criticisms of images, names and branding, recognizing the need to invest in changing systems and practices, and making concrete commitments to hiring benchmarks or other specific and potentially meaningful policy changes. But as Professor Newkirk shows, Corporate America’s track record on racial justice is not promising. Just as longstanding approaches to sexual harassment were more symbolic compliance than meaningful intervention, the world of diversity consulting is a story of as much as $8 billion a year spent with little to show for it.  So what can companies do that can actually make a difference?

In the new paperback edition of Diversity Inc., Professor Newkirk included a series of best practices provided by Working IDEAL — ways that companies can make good on their promises by applying best practices based on social science research and our experience with organizations large and small across multiple industries. 

Here are a few of those recommended practices that Working IDEAL recommends to our clients to hire and retain great people and increase engagement, productivity, retention, and innovation.  Want the whole list?  Get the book!

Expand Recruitment Through Intentional Outreach. For example, work to build relationships with programs in your field, industry and community to access talent, and then tailor recruitment plans to identify the best sources of diverse candidates for specific jobs or groups of jobs. 

Identify and Remove Barriers in Hiring, starting with how you identify and evaluate skills and criteria. Education and specialized training requirements can serve as unnecessary barriers to increasing diversity in key entry-level and higher-level positions, especially when there are equivalent or alternative skills and experience that may add value, or the potential to invest in on-the-job training.

Institute a “Rooney Rule” diverse slate policy but also take steps to ensure its success. This means defining diverse slates to require consideration of multiple women and people of color, and providing the training and tools for hiring managers and holding them accountable to follow the policy. 

Make information on pay practices transparent and accessible to employees.  Instead of guessing about what candidates will accept, or trying to underpay those with less market power or information, affirmatively provide starting salary information to job candidates.  Ensure employees can freely share information about pay — in most cases it’s legally required.

Measure your results like any business process, auditing your hiring, pay and promotion practices — and your culture and developing metrics to track them going forward. You can use anonymous tools like surveys, and internal discussions across functions and levels, to identify issues and source responses. Track attrition and understand why some groups of employees are more likely to leave. And make sure to regularly share all that information with leaders and decision-makers and use it to hold them accountable. 

Don’t ignore problem behavior. Have safe and accessible options to report, address, and resolve workplace problems, and make sure you act quickly to address toxic or harmful workplace culture at any level of the organization. 

Give people in your organization the power to make change.  If you have named an internal DEI leader or officer, make sure they have the information, access, and power needed to successfully carry out their responsibilities. If you are using an internal committee, resource group or affinity group to support and engage employees, provide the resources and processes that empower them to deliver meaningful value and support to leadership.

Working IDEAL provides trusted and innovative advice on inclusive workplaces, diverse talent, and fair pay. Contact us to learn more about the services we offer.

Author: Pam Coukos

A Just and Inclusive Workplace is Essential to Sustain Our Democracy

In 2017, the increased public visibility of the #MeToo movement made clear we were not doing enough to make the workplace safe from sexual harassment. In 2020, #BlackLivesMatter organizing similarly forced a broader and overdue reckoning with how deeply racial inequity runs in many institutions — including our nation’s workplaces, which need to be more inclusive.

The images of the first week of 2021 – a Confederate flag carried through the halls of Congress, people in the crowd breaking into the Capitol wearing shirts emblazoned with slogans about genocide of the Jewish people, a Black police officer against a mostly white crowd of insurrectionists – reinforce the urgency of our work to build a just and inclusive society.

As Cyrus said in December, in a recently-published interview in the Wall Street Journal, “Our democracy is not sustainable if don’t embrace equal opportunity.” 

But to do that we need truly innovative approaches. We must expand our thinking about what the barriers are and how to break through them.  As we welcome a new Administration that has committed to make racial justice and economic empowerment top priorities, and a new Congress that can move this agenda forward, we want to highlight some key innovations in government policy and workplace practices that can have the biggest impact.

1. Have the Security and Exchange Commission require transparency on diversity and inclusion. All large, publicly traded companies should make standard disclosures about hiring, representation, leadership and pay. As Cyrus explained to the Journal:

Merge SEC disclosures—annual reports, 10Ks—with advancing equal opportunity. For example, require companies to disclose race and gender data for their top 200 highest-paid employees. It’s a way to understand where the glass ceiling is. Do it by total compensation so it includes stock options. It’ll tell you who’s in the decision-making pool of the company. 

And as we explained in our 2016 proposal to the SEC, this empowers investors, workers, customers and community stakeholders  to make informed choices about where to spend their money.

2. Make your default hiring practices more inclusive, by ensuring you interview multiple women and people of color.  Cyrus explains why this disrupts default assumptions:

If you have one woman versus two women on a slate, when you go to two women, it’s 79 times more likely that a woman will be selected [than if there was only one woman in the pool]. When you go from one to two people of color, the number goes up like 190 times. If there are multiple diverse candidates, they’re multiple times more likely to be hired. Why is that? When you have isolated, coveted jobs, you need to do something to change the norms because the presumptions and stereotypes are so deeply rooted. 

Congress can lead the way by adopting the Rankin-Chisholm rule for its own hiring (a “Rooney Rule” for the Representatives), and by encouraging members to practice #CampaignEquity when they run for re-election.  

3. Make our nation’s first civil rights law a more effective tool for racial justice, so it can work to close the racial wealth gap, ensure real equal access to credit, capital, employment and economic participation. Amending Section 1981 would enable it to live up to its promise.

4. Understand how building racial justice at work includes ensuring fair pay. As Pam shared in an online presentation last fall:

Make equity a top priority when you make decisions, take actions, design programs and measure results. Gender, race, sexual orientation, disability, or any aspect of your identity should not determine your outcomes in the workplace – including pay.

The Administration can do its part by reinstating and expanding pay data collection and reinvigorating equal pay enforcement – and by ensuring that we do not just talk about the gender pay gap. We must recognize and address pay gaps based on race and ethnicity and the particular impact of both on women of color.

5. Promote an inclusive workplace culture free of harassment, bias and discrimination – starting with the people who do the people’s work in our federal and state governments.  Assessing culture, ensuring inclusive policies and practices, and acting quickly to address disrespectful behavior before it becomes toxic should be standard practice. President Biden should consider an Executive Order directing all federal agencies to adopt effective initiatives to promote equal employment opportunity and inclusive workplaces, and revoking a series of anti-DEI actions from the fall.

At the end of the day, Cyrus’ observation from December of 2020 seems even more true in January of 2021: 

There is a moral case for diversity and inclusion. And there’s a business case: long-term value is tied to diversity and diversity is tied to innovation. But the last few years have told us there is a democracy case, too.

 

Working IDEAL provides trusted and innovative advice on inclusive workplaces, diverse talent, and fair pay. Contact us to learn more about the services we offer.

Authors: Pam Coukos and Cyrus Mehri

Support the Call to Dismantle Systemic Racism

By Pamela Coukos

Here at Working IDEAL, our work is national but our home is Washington, DC. We support the thousands who are gathering in the streets of DC and across the nation to demand justice that is long overdue. The government must respect the rule of law and the right of all to freely assemble and be heard.

Our mission is to help organizations build more diverse, inclusive and equitable workplaces. That requires changing the workplace culture, by addressing the structures and practices that can enable privilege and perpetuate racism and injustice.

We support the call to dismantle systemic racism in our police departments, our workplaces, and our national culture. We recommit to the work of transforming systems and practices to ensure equity and justice for all.

Does the law protect the LGBTQ community from discrimination? It should be an easy answer.

By Jenny Yang

Originally published in The Washington Post

Jenny Yang, Strategic Partner at Working IDEAL, was commissioner of the U.S. Equal Employment Opportunity Commission from 2013 to 2018 and is a senior fellow in the Center on Labor, Human Services, and Population at the Urban Institute.

The Supreme Court decided Monday to hear a trio of cases addressing a long-disputed and critically important question: whether discrimination based on sexual orientation or gender identity is prohibited under the Civil Rights Act of 1964. This issue has profound implications for our understanding of the meaning of equality. Although this question has fractured the United States for decades, the answer should be easy.

Title VII of the Civil Rights Act bans employment discrimination “because of [an] individual’s race, color, religion, sex, or national origin.” Sexual orientation and transgender status are not listed as specific protected categories. But no such language is required. The beauty of our nation’s civil rights laws is that they protect everyone — including lesbian, gay, bisexual and transgender people — who faces discrimination based on sex.

Under Supreme Court precedent, the question should be whether an employer relied on sex-based considerations or took gender into account when taking the challenged employment action. In 1989, the Supreme Court established in Price Waterhouse v. Hopkins that discriminating against an employee for not conforming to gender stereotypes — in this case, not walking, talking or dressing “more femininely” — is sex discrimination. The court concluded that Title VII means “that gender must be irrelevant to employment decisions.”

In 1998, a unanimous Supreme Court in Oncale v. Sundowner resolved a dispute among the lower courts, finding that Title VII prohibits the “entire spectrum” of sex-based discrimination — even a man harassed by other men. Although Congress may not have contemplated this situation when it passed Title VII, Justice Antonin Scalia, in writing for the majority, called for “common sense” in evaluating claims in “social context,” recognizing that “statutory prohibitions often go beyond the principal evil to cover reasonably comparable evils.”

In 2015, while I served as chair and commissioner of the U.S. Equal Employment Opportunity Commission, we deliberated carefully before concluding in Baldwin v. Department of Transportation that discrimination based on sexual orientation is discrimination because of sex. The commission determined that this reading of Title VII is the most faithful and common-sense interpretation of the plain words of the law and Supreme Court precedent. In 2012, the commission in Macy v. Department of Justicereached a similarly straightforward conclusion that discrimination against transgender people is a form of sex discrimination.

In Baldwin, the commission explained that the concept of sexual orientation is inseparable from and cannot be explained without reference to sex. Indeed, an employer that fires a woman because she has a female spouse has taken gender into account where the employer would not have fired a man for that reason. In addition, courts have long recognized that employers cannot discriminate against employees for associating with someone based on race, and these principles apply equally to same-sex relationships.

To be sure, when the commission decided the Baldwin case, we were well-aware of the contrary precedent on this issue. Although earlier case law essentially carved out an exclusion in Title VII for discrimination based on sexual orientation even if related to sex, this reading finds no support in the statute. Indeed, many of the cases holding that Title VII does not cover sexual orientation either predate the Price Waterhouse and Oncale decisions or reflexively adopted earlier outdated reasoning.

Notably, this precedent developed largely in the 1970s and 1980s when same-sex relationships were not just a cultural taboo, but also a crime in many states. These cultural biases prevented a straightforward application of the sex discrimination language of Title VII. Today, we have an opportunity to ensure our understanding of equality is not the product of historic biases.

I am often reminded of Justice Anthony M. Kennedy’s words, writing for the majority in recognizing marriage equality, that the “nature of injustice is that we may not always see it in our own times.” Throughout history, we have seen that, as our nation evolves, we continue to define what it means to be equal.

Most courts once ruled that sexual harassment in the workplace was a personal matter or an inevitable result of having women in the workforce and not a form of sex discrimination. Often it takes a cultural shift to change our understanding of long-standing practices that may have been widespread and tolerated but are unjust and illegal.

Today, courts are increasingly recognizing that no statutory basis exists for excluding LGBTQ individuals from the rights provided to us all. The ability of millions of Americans to support their families and live with dignity should not need to wait for further congressional action. Congress has already spoken by prohibiting discrimination based on “sex.” And that is why this should not be a hard decision.

The EEOC report may be on hold, but pay data reporting isn’t going away.

Last night the EEOC announced that its new pay data report is on hold and will not be implemented as scheduled in March of 2018.

Working IDEAL supports the EEOC pay report as an important tool to move us forward on closing the wage gap.

Here’s what we already told EEOC about how they could use the data to boost enforcement:

  • Increasing the number of employers that monitor their pay data and practices regularly is essential to closing the pay gap — required reporting will motivate employers to work on improving their data and systems so they can do it better.
    Research shows that measurement and increased accountability are one of the best ways to improve EEO performance, and boost diversity, equity and inclusion. In other words, what gets measured gets done.
  • Requiring companies to regularly analyze and report their gender and race wage gaps focuses management on an issue of increasing importance to stakeholders, regulators and the public.  It creates a mechanism for them to assess and improve their performance over time.
  • Reporting also makes it more likely companies will find problems when they exist and take voluntary measures to fix them. This is good for workers and employers — and avoids potential enforcement actions.
  • Using (and reporting) benchmarks by industry, size and other factors makes it easier for the agency and employers to identify problems by comparing their own data to benchmark values, and helps target enforcement and voluntary compliance resources.

There is a lot more detail about all this in our comment, including our ideas about using benchmarks.  You can read it here: Coukos Working Ideal Comment on EEOC Pay Data Collection

It’s very disappointing that this will not be moving forward now. But employers who take this issue seriously have the opportunity to review their own data and resources, establish their own plans and benchmarks, and engage their workers and stakeholders. And given that some states (and even cities) are showing increasing interest in moving ahead on pay equity, state legislators may start proposing pay data reports of their own. Those with concerns about the EEOC proposal should be thinking hard about meaningful and effective alternatives and options. Pay data reporting is on the agenda now, and it isn’t going away.