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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

How the SEC Can Harness Shareholder Power to Support Racial and Gender Equity Through a DEI Index

On its very first day, the Biden-Harris Administration made racial justice and equity, and principles of nondiscrimination and equal opportunity, top priorities on its agenda.  The first of the 17 Day One Executive Orders committed to advancing racial equity and support for underserved communities across the federal government.  The EO requires a review of federal programs and regulatory processes to incorporate equity principles – while rescinding the Trump Administration’s anti-DEI Executive Order. It also includes improvements to data collection, which is a key practice of accountability. Other actions include:

The Administration could bolster this by leveraging the SEC’s  power to regulate publicly traded companies. A Diversity, Inclusion and Equity Index could harness shareholder power to ensure our publicly-traded companies make good on their their commitments to equality. A standard set of disclosures about hiring, representation, leadership and pay would empower customers and investors to make informed choices about where to spend their money. Workers could use this information to find jobs at places that offer true opportunity for all. Companies would compete to show their progress and we could all have a clearer sense of who is living up to their stated values. Competition would be the engine behind genuine, long overdue progress.

All large publicly traded companies should disclose standard information on key measures of DEI performance.

First, demonstrate Board Accountability for DEI, by sharing Board representation, whether the Board uses key best practices to foster diverse membership, and whether the Board provides effective oversight of People and Culture programs to address workplace harassment and promote inclusive culture.

Next, provide data on Leadership Diversity, including how the top 200 highest compensated individuals identify (by gender, race, ethnicity, and if available, by disability and sexual orientation).

Third, disclose Workforce Diversity and Pay Equity metrics, including companywide EEO-1 representation data and standard pay equity benchmarks similar to those already reported in the UK, and corporate performance on its own diversity metrics over time. 

Lastly, share progress on Inclusive Workplace Practices, including whether the company has developed and implemented key best practices to address workplace harassment and promote inclusive culture.

We already recommended that the SEC impose this type of requirement, but there are plenty of other ways this could come about. Indexes could make this a listing requirement. Institutional investors could use it as a factor for their portfolio decisions and federal, state and local agencies could use it as a benchmark in awarding contracts. And companies could voluntarily commit to these disclosures as a way to demonstrate leadership. 

The biggest winners will be the companies themselves. The research we shared with the SEC supports the view that diverse teams can provide key benefits, like increasing productivity and innovation. Strengthening DEI can lead to stronger and more sustainable financial performance.

Indeed, that is exactly the reason that this information is material to shareholders. The traditional view of shareholder disclosure is only aimed at information relevant to short-term shareholder gain. But the modern view includes any matters material to other stakeholder long term interests including investing in employees and fostering diversity, inclusion, dignity and respect, an approach championed by the Business Roundtable.

Despite the benefits, too many companies have not made DEI enough of a priority. Reviewing a typical corporate annual report or 10-K will show frequent touting of corporate physical assets, new product lines, mergers and acquisitions, but see very few, if any, words touting new investments in people and culture, or new efforts to develop, retain and strengthen the workforce. Most annual reports to shareholders virtually ignore the companies’ most important asset: its workforce.

We learned that to create change in a company, someone has to own and drive the change, which means the Board should have a specific subcommittee focused on oversight of People and Culture programs, with regular reporting from management on goals and measures. Through increased transparency of key measures of leadership and workforce DEI, we can use the market to move stalled progress on glass ceilings and wage gaps for people of color as well as for women. 

We want to motivate companies to invest in diversity and inclusion, people and culture, growth and retention. It’s good business that can yield an enormous competitive advantage and allow companies to make good on their commitments to equity.

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

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

How to Build an IDEAL Campaign Workplace – So You Can Win with Integrity

We are just two weeks out from Election Day, and campaigns everywhere are in the final stages of getting out the vote.  It’s an intense time for campaign managers and their staff, who are working almost around the clock to bring their candidate successfully across the finish line.

How these last couple weeks play out could depend a lot on campaign equity, and how much a campaign values and supports the people they hired months ago to carry them to victory. On those campaigns where leadership has focused from the start on building a strong and inclusive culture — and aligning their workplace practices with the values they are fighting for on the trail — that final push can be a time of solidarity and dedication. But where leaders have enabled or ignored a toxic work culture, or simply neglected to establish the basic operational practices necessary to a functioning workplace, the strain of going all out to win can be a breaking point.

This is what we have learned in our work this cycle advising political campaigns and advocacy organizations: a commitment to campaign equity is a critical component of a winning strategy. Hiring and empowering a diverse staff can generate more innovative tactics and better advice on reaching all voters. Ensuring equity in your pay and practices can simplify your operation and increase staff dedication. An inclusive culture sustains the people power you will need to carry you through the constant challenges of a campaign environment.

But even more importantly, these approaches can help you win with integrity. If you are a progressive candidate, or a leader on a progressive campaign, it is not enough to fight for good policies and to champion racial and gender justice in public. You also need to make sure your own house is in order, and that you have the policies and practices that ensure the safety of your staff and volunteers and promote equity and inclusion in all your in-person and remote workspaces.

We put all of these ideas together in a #CampaignEquity Handbook. This resource for campaign professionals includes strategy checklists, sample policies and plenty of links to the research and experience that backs them up as best practices. It includes advice on building a harassment-free workplace, staffed by great hires and sustained by fair pay and a safe and inclusive culture.

Working IDEAL Campaign Equity Toolkit checklist excerpt

Checklist excerpt from the #CampaignEquity toolkit. Click on image to learn more.

When campaign leadership comes together after Election Day to understand what worked and what didn’t – the factors that carried them to victory and should inform their transition plans – we hope this can inform those conversations.  And as the next cycle begins, we believe this will be an essential resource.

Campaigns are workplaces too. Let’s put an end to the myth that overwork and toxic work environments just go with the territory and that diversity, equity and inclusion are just the extras you hope to get to at some point. Investing in #CampaignEquity can increase your chances of winning, and of doing it based on the values that brought you to this work in the first place.

DOWNLOAD THE TOOLKIT (PDF)


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 Peach Soltis

COVID-19 Resources for Employers and Employees

By Sarah Crawford

Working IDEAL has compiled a resource guide for employers and employees regarding implications of the coronavirus for the workplace. This guide provides links to resources offered by federal agencies (included resources in Spanish), state and local governments, and public interest organizations that explain legal obligations and best practices for employers and legal rights and benefits for workers. 

Recent legislation provides relief for employers and employees. The CARES Act provides enhanced unemployment benefits for workers and forgivable loans to small business owners to continue to pay employees and cover certain costs under the Paycheck Protection Program. The Families First Coronavirus Response Act expands workers’ rights to paid sick leave and paid family and medical leave. 

The Center for Disease Control released guidance for employers to prevent the spread of the virus. The guidance encourages employers to actively encourage sick employees to stay home, identify where and how workers might be exposed to COVID-19 at work, separate sick employees, educate employees about how they can reduce the spread of COVID-19, identify a workplace coordinator, implement flexible sick leave policies and practices, assess essential functions, determine how to operate if absenteeism spikes, consider establishing policies and practices for social distancing, etc.

The Department of Labor has released guidance relating to workplace safety, expanded sick leave and family and medical leave rights, unemployment benefits, etc.

The EEOC has provided updated technical assistance, including a pre-recorded webinar, that addresses the Americans with Disabilities Act and what information employers may request from employees who call in sick, when employers may take employees’ temperature, whether employers may require employees to stay home if they have symptoms, and whether employers may require doctors’ notes certifying fitness for duty upon employees’ return to work. 

In addition to reviewing these federal resources, employers and employers should review applicable state and local legislation and programs regarding unemployment benefits, paid sick leave, workers’ compensation, teleworking, identifying “essential” workers, etc.