Looking to Benchmark Pay?
SUMMARY
Today, women in the workforce have reason to be optimistic. The changing nature of the economy, from manufacturing to service, encourages a rise in their earnings. Still, women earn only 84 cents to every male dollar earned. This hurts men too, as men who work in female-dominated positions earn lower pay. Further, women provide at least half the household income for over half of the families and are head of household in over one-third of the families in the U.S.
Legislation
The Equal Pay Act of 1963 requires that organizations pay men and women the same wages if their jobs are substantially equal. Comparable worth contends that men and women be paid the same wages if their jobs have the same value for the organization regardless of job content. This latter concept is much more contentious, but it is definitely gaining ground, if not in the courts, then certainly through union activity. The proposed Paycheck Fairness Act would likely increase the protection of equal pay rights, but it has yet to be passed by the U.S. Senate. The California Fair Pay Act implemented January 1, 2016, which may well become a model for other states to enact their legislation, strengthens the state’s existing equal pay laws by eliminating loopholes that prevent effective enforcement and permits employees to discuss their pay.
Identifying Discrimination
Administrators of compensation plans deal with cross-functional decisions made by many stakeholders in the organization. Discrimination in pay within the organization is more often unintentional than it is overt and purposeful. As with access discrimination and valuation discrimination, it is necessary to develop policies and procedures to guide this decision making.
Resolving Discrimination
In order to eliminate the gender pay gap in your organization, it is necessary to perform a comparable worth study to determine which jobs have equal value for your organization. A high-quality job evaluation plan can accomplish this goal. Then you need to establish a new pay policy line based upon competitive market rates for the male-dominated jobs. After this, you can set the pay of both male- and female-dominated jobs, based upon the comparable male jobs' pay. A single salary structure will aid in resolving pay gap discrimination issues.
Preventing Discrimination
Organizations must be compliant with the laws regulating equal pay. Effective and up-to-date job analysis, job documentation, job evaluation, hiring and promotional practices, training and development, and fair and equitable pay practices all work together towards the reduction and elimination of the gender pay gap.
Opportunities for women to receive education and enter higher-paying careers in STEM (science/technology/engineering/mathematics) fields have a significant effect on the reduction of the gender pay gap. Training and development to enter senior management and executive positions also contributes to the reduction of the gender pay gap.
Starting salaries and merit increases are both places where women can fall behind men in their wages. These areas can be monitored by the organization tracking the movement of men's and women's wages over time. Further, organizations should proactively hire women for male-dominated positions.
Ultimately, these are the best ways to close the gender pay gap. Human Resources strategies and proactive management of these important decisions by line management and Human Resources are critical in overcoming the gender pay gap.