Fighting discrimination in the workplace is currently a hot topic, but it’s nothing new. Many modern equal pay laws have been in existence since the early 1960s when the Equal Pay Act and Title VIII were passed to help ensure that no qualified candidates would get passed over by employers due to their sex, race, color, religion, national origin, age, and/or physical condition. Ever since, more and more stringent laws have been put into place to rectify the situation, but many women’s rights activists think that the U.S. government isn’t doing enough to establish decrees that are rigid enough to help close the gender wage gap for good.
Certainly, the claims are not unfounded. According to data published by the American Association of University Women (AAUW), as of 2017, women made roughly 20% less than men – and those figures show an even wider gap for women of color, particularly Hispanic/ Latina and Black/African American workers. Back in 2016, President Obama attempted to amend the situation by introducing a rule that made it mandatory for large American firms to report their wage disparities. The proposal gave hope to the cause, until it was later struck down by President Trump earlier this year.
The decision was a disappointing one for those invested in the shattering of the “glass ceiling,” but it also prompted local and state municipalities to enact their own programs. Here are 3 facts you need to know about gender wage gap reporting and how it could affect our country’s biggest players in the future.
1. Gender wage gap reporting is mandatory practice in many other first-world nations
Included on this list are Japan, Belgium, Australia, and, most notably, the UK. Beginning on April 4, 2019, all companies operating within the United Kingdom that employ 250 workers or more must submit their internal gender wage gap statistics. This comes exactly a year after the companies were originally required to do so, a program which started in the spring of 2018.
Once this 2019 deadline hits, each and every one of the companies who submitted their original reports in 2018 will be required to demonstrate the progress that they’ve made over the calendar year in closing the gap. Depending on the size and set-up, the companies must also strive to meet a “30% goal” in which at least 30% of its board members are women.
Perhaps unsurprisingly, some of the biggest players in business, particularly ones in the finance sector, displayed abysmal results when their 2018 reports were released. For instance, HSBC revealed that, on average, its female employees make 59% less than their male employees, a fact that has sparked even more support for these new gender wage gap reporting laws, not just in the UK but also in the US.
2. Some local and state municipalities are requiring more pay transparency
Just because President Trump struck down President Obama’s original proposition for gender wage gap reporting, it doesn’t mean that lesser branches of the government aren’t instituting their own programs. According to BBC News, a handful of state and local municipalities, including California, Massachusetts, New York City, and Puerto Rico have made it illegal for employers to ask about a candidate’s current or previous income.
While this doesn’t put the same pointed pressure on companies in the same manner as the UK, it does help guarantee that certain employees don’t continue to get short-changed at their new companies. Currently, the aforementioned municipalities are the only ones that have the laws in place, but more than 20 states are considering similar ones. If supporters get their way, the laws might even be enacted at a national level, a move that could support other categories of under-compensated workers, not just women workers.
3. Smart companies are paying attention to the pay transparency evolution
Companies who have pioneered the workforce diversity movement have reaped the benefits of inclusion, with some performing an incredible 35% better than their homogeneous or male-centric competitors. That said, the companies who are set to attract the best and brightest talent are the ones who embrace the closure of their own internal gender wage gap.
As an example, Forbes recently reported on a UK tech firm that proved critics wrong when it decided to publish all of its salaries, from the highest paid all the way down to its lowest. The firm, Verve, decided to implement the program in order to take away the emotion and taboos often connected with the subject of equal pay. Its philosophy is that, if an employee’s salary is solely performance-based, any discriminatory wage gap will work itself out and quickly narrow.
According to CEO Callum Negus-Fancey, this very program highlighted the areas in which the firm was doing something right; it revealed that the male-female ratio at the company is roughly 1-1. Additionally, almost everyone seemed to be firmly on board with the plan as a reported “0%” of its workers left due to the results. Negus-Fancey also asserts that Verve’s commitment to transparency has enticed the attention of the caliber of employees he wants to hire.
“Pay transparency helps attract a more diverse workforce. People join organizations based on what they do, not what they say,” explains the CEO. “They want to see tangible proof that your company encourages diversity.”
Although much of American politics is currently mired by the hallmark of division, it’s clear that smaller municipalities and forward-thinking companies are doing their part to help close this ugly institutional pay gap once and for all.
Categories Human Resources
Angela Stringfellow is a writer with 10+ years of experience. She focuses on news, trends, and insights in marketing, business, and technology.