FAIR PAY ACT OF 2009

Written by: Patricia Bagby

In 2005, I had the pleasure of speaking at the Today’s Woman Expo on Pay equity for women. At that time, I reported that several major studies showed that women—in almost every category—were paid less than men doing the same work. In 2008 studies from labor unions, as well as studies on vital statistics for professional women, show that the pay gap between men and women still exists.

Here is the update. Women earn approximately 78 cents on a dollar for every dollar a man earns in a year. More important, there is a major change in employment law.

On January 29, 2009, President Barrack Obama signed the Lilly Ledbetter Fair Pay Act of 2009 (“Act”), which supersedes the Supreme Court’s decision in Ledbetter v. Goodyear Tire & Rubber Co., Inc., 550 U.S. 618 (2007). Ledbetter had required a compensation discrimination charge to be filed within 180 days of a discriminatory pay-setting decision (or 300 days in jurisdictions that have a local or state law prohibiting the same form of compensation discrimination).

The Act restores the pre-Ledbetter position of the EEOC that each paycheck that delivers discriminatory compensation is a wrong, and actionable under the federal EEO statutes, regardless of when the discrimination began. The Act has a retroactive effective date of May 28, 2007, and applies to all claims of discriminatory compensation pending on or after that date.

Lilly Ledbetter is perhaps the best-known face of pay equity. She worked for the Goodyear Tire & Rubber Company but discovered she was paid significantly less than male co-workers with the same job. She filed suit under Title VII of the Civil Rights Act of 1964 and was awarded back pay and other remedies in a jury trial. However, the U.S. Supreme Court, in a May 2007 5-4 decision, reversed that award, leaving others in Ledbetter’s situation with virtually no recourse to pay discrimination.

Laws barring discrimination in education and employment give working women opportunities our mothers and grandmothers never had. Today, women work in many different fields, each requiring different skills and experience, and paying different wages. However, opening doors for women has not closed the door on pay discrimination. Equal pay is still a problem for many working women.

Let me clarify my point here. I want to educate you on a few issues on the topic of Equal Pay for Women and tell you what you can do if this is a concern of yours. My intent is not political—it is practical. Therefore, read this article for information—DO NOT go to your boss and say, “I need a raise because Pat Bagby says…” I promise you that will not get you an increase, even though you may deserve one.

Now, to give you some background on Equal Pay Issues: The differential in pay between men and women remains an issue in today’s workplace. Statistics show there is a tendency too undervalues a woman’s work and contributions.

The National Women’s Law Center, the AFL-CIO, and others say this difference is mainly the result of gender-based discrimination. It is important to recognize other factors that also influence the differential—education, occupation, skill, experience, race, and hours or time in the work force.

Women have earned more bachelor’s degrees than men since 1982 and they have earned more master’s degrees than men since 1981.

Interestingly, the wage gap is largest among the most highly educated groups. Some people say one of the causes for the pay gap is work/family choices. NOT TRUE! The facts show that pay equity—economic equity—is a simple matter of justice. Wage inequalities are not a result of women’s qualifications or choices.

Damages paid for pay inequities rage in millions of dollars, or—in some cases—billions. Some of the more widely publicized lawsuits involving equal pay and compensation include Wal-Mart, Smith Barney and Morgan Stanley Dean Witter, Rent-A-Center, Texaco, Office Depot, and Home Depot.

Simply because a company or an organization has been sued does not mean it is guilty. When the notorious bank robber Willie Sutton was asked why he robbed banks, he famously replied, “Because that is where the money is.” Sometimes lawsuits are brought against large companies for the same reason. The prospect of expensive litigation and the accompanying negative publicity have prompted many organizations to forgo their day in court and settle. Again, just because an organization is sued or settles does not mean it is guilty.

HERE IS SOMETHING YOU MAY NOT KNOW: The Equal Pay Act applies to any employer that has two or more employees and is subject to the Fair Labor Standards Act. Some courts not only allow employees to sue their corporate employer, they also allow the employee to sue individuals such as managers and supervisors who control some aspect of their employment. According to these courts, managers and supervisors who exercise such control are just as much “employers” as defined by the Equal Pay Act as the corporate entity is.

Human Resource professionals are charged with ensuring that workplaces are free from discrimination. It is completely baffling why discrimination based on sex and race continues when so many HR professionals are women—members of a protected class! HR professionals—whether male or female—must live up to their leadership responsibilities and ensure that all employees, at all levels, understand the organizations’ policies and know that discrimination of any kind, from anyone, will not be tolerated. Otherwise, all the employment policies in the world, no matter how well conceived, will be meaningless.

Before companies can remedy pay inequity, they must understand how it can develop. Sometimes, inequities crop up when a company grows to fast or gets involved in mergers and acquisitions so quickly that it does not adequately monitor its employment data.

Another possible cause of gender pay inequity comes when companies do not have a corporate wide system for addressing compensation. In such cases, individual managers set their own rules—with potentially disastrous consequences; they make decisions without knowing the legal limitations involved in wage and selection decisions.

When companies do not have clear organization wide guidelines regarding pay, sometimes women may be ineffectively negotiating salaries. You may want to pick up a copy of the book WOMEN DON’T ASK: NEGOTIATION AND THE GENDER DIVIDE, by Ellen Babcock and Sara Laschever. Their premise is that women collectively leave millions of dollars in compensation on the table by not negotiating salaries.

If you should find yourself negotiating compensation, for a new position, I have a few tips for you:
· Do Your Homework: Preparation is key in any negotiation. Understand what your skills are worth to the market. Go online, find salary surveys, and talk to people in the job associations, headhunters, and even other employers.
· Do Not Talk Salary Upfront: When a prospective employer wants you, the more that employer will be willing to pay to retain your services.
· Expand the Discussion Beyond Base Salary: Make sure you inquire about benefits and potential for bonus.
· Do Not Feel Compelled to Accept the First Offer: It may be just the starting point. However, do not overplay your hand.
· Only Negotiate What’s Important to You: Pick your battles, as hopefully, this is the beginning of a rewarding professional relationship.

Even if it is true that women do not negotiate well, companies are not absolved of liability. The Equal Employment Opportunity agencies pre-suppose that the vigilant employer, aware of its EEO obligations, will make sure that its compensation system is determining salary, rather than allowing aggressive candidates and passive hiring managers to make the decisions.

Equally important, the costs of underpaying people are clear: damaged morale, lower productivity, and higher rates of attrition, all of which are costly—especially attrition. As important as it is to pay employees equitably, it is also important to give them equal access to promotions.

Despite the Equal Pay Act’s general requirement of pay equity between men and women, several legitimate and lawful reasons still exist for paying a man more than a woman. Those reasons must be bona fide job qualifications

Here is the big question: What can you do if you believe there is inequity in your company? Carefully examine your company’s pay practices, including seniority systems, merit systems and incentive systems. Make sure you know what duties each job in your organization entails, what working conditions the jobs are performed under and what skill and effort are required to do each job. Use this information to evaluate which jobs in your company are entitled to equal pay under the Equal Pay Act.

Look closely at male dominated and female dominated jobs. These jobs may look different on the surface but may be equal under the Equal Pay Act if they require equal skill, effort, and responsibility and are performed under similar working conditions. If you can prove that differentials are based solely on gender, work with human resources and your employer to make the relevant wages more equitable. You and your co-workers can encourage your employer to implement a pay equity policy.

If your company does not have a human resources department, you can ask your employer to hire an outside consultant for assistance. You need someone who is objective and has the knowledge and skill to develop a job evaluation system.

Keep in mind that the Equal Pay Act makes it unlawful to reduce the pay of one gender to match the lower pay of the other. Instead, you must raise the pay of the employee who is being paid less. Although this will cost the company money, it is much cheaper than the penalties it will pay for violating the Equal Pay Act.

The Federal Equal Employment Opportunity Commission enforces the Equal Pay Act and Title VII, as well as several laws barring discrimination. If you believe you have been denied a job, paid less, passed over for promotions or discriminated against in other ways because you are a woman, you can file a complaint with the EEOC office in your area.

The best reason to close the pay gap relates to the relationship between human capital and the bottom line. When people with a large knowledge base about a company walk out the door, it is expensive to replace them and rebuild that knowledge base.

Equal pay is not just a working women’s issue; it is a family issue. If we ended pay discrimination against women, family incomes would rise. Working parents would have more to spend on household needs and more to save for their children’s education or their own retirement security. Working parents might be able to spend less time at work and more time with their families, a change that many families would welcome.

Single women would have more money to spend to improve their skills and their quality of life. These are just some of the of the benefits gained from eliminating discrimination in pay.

If you are aware of unexplained differences between your own compensation and coworkers’ compensation and believe that the difference is because of your race, color, religion, sex, national origin, age, or disability, you should call 1-800-669-4000 or 1-800-669-6820 (TTY) for more information on filing a charge with the EEOC.