When it comes to the pay gap between men and women, I am
Well, wait a minute. Let me try that again. I'm not
skeptical about the existence of the pay gap. I'd be a fool to deny all
that cold, hard reality. I just don't think it's usually a result of sex
discrimination. Nearly all of the pay gap can be explained by the lifestyle
choices that women are more likely to make. Such as the following:
*Until the latest generations of women,
entering the workforce later than men.
*Until the latest generations of women, less
formal education than men. (For you youngsters who may not know,
back in the dark ages, women used to drop out of school to get married. Really!)
*Then and now, interruptions of career to
bear and rear children.
*Choosing a "job" instead of a
"career" to have more time for family.
*Working fewer hours because of
*Placing a premium on flexibility rather than
money because of personal/family needs.
*Tending to choose cleaner, safer jobs that
don't involve heavy lifting, extensive travel, or other "negative"
working conditions where the tradeoff may be premium pay.
Now, if you are a female zillionaire CEO or a single mom
who is the sole financial support of her family, please don't tell me I'm full
of beans. I know there are plenty of women who earn more than their husbands,
or even have husbands who stay home and take care of the kids full-time, or
don't even have husbands at all. But statistically speaking, women are far more
likely to take on most of the "family" responsibility while their
husbands focus on being the primary economic support of the family. And, I
submit, this explains nearly all of the "gender gap" in pay.
In other words, as
I've said before (scroll down to No. 5), I think the "women
earn only 81 cents for every dollar that men earn," is a gross
exaggeration to the extent that it's used as evidence that rampant sex-based
pay discrimination continues to plague our nation.
OK. I hope I have sufficiently disclaimed what is about
The U.S. Court of Appeals for the Seventh Circuit, which
hears appeals from federal courts in Illinois, Indiana, and Wisconsin, reversed
summary judgment for an employer in an equal pay case [an enhanced version of this opinion is available to lexis.com subscribers].
Before I talk about the case, let me share what we
usually find when we audit pay. I've done my share of "compensation
analyses," either in connection with equal pay charges or lawsuits, or
audits by the Office of Federal Contract Compliance Programs, or sometimes just
because the employer wants to make sure it is paying employees in a fair and
What we usually find is a lot of gaps, frequently
correlated with race or sex. To put it more bluntly, what we usually find is
that the white guys generally are making the most money. But, as we all
is not causation." When we probe, we usually find good,
non-discriminatory explanations for almost all of the discrepancies. Maybe Joe
was hired with 20 years' relevant experience, while Mary was recently promoted
from a lower-level position. Maybe Mary had a five-year interruption a few
years ago while her kids were in preschool, and hasn't caught up since her
return to the work force. Maybe the gap can be explained by some other reason,
like Joe is a hard-working, extremely talented, prince of a fellow, beloved by
all, and Mary is a rude, clock-watching, incompetent ninny who doesn't even
deserve to work when you really think about it.
However, we also frequently find one or two people whose
pay is below where it should be and for whom there is no good explanation. This
doesn't necessarily mean that discrimination was the reason. But if you're sued
or audited by the government, and a pay gap is discovered that you can't
explain, a judge or jury, or the government, is going to assume that the real
reason was discrimination.
(The good news is that if you find discrepancies like
this on your own, it's pretty easy to fix them by making a pay adjustment.)
Which brings us back to this Seventh Circuit case, which
contains some good lessons for employers who want to ensure that they're
"clean" from an equal pay standpoint. So, let's make the usual
Y-shaped incision and perform an "autopsy" of the case, shall we?
The plaintiff in King v. Acosta Sales and Marketing
also had sexual harassment allegations, but I no talk about that.
Ms. King was a business manager whose compensation was
supposed to be based primarily on sales results. The employer conceded that her
results were better than those of most of her peers, so she wasn't like my
fictional Mary the ninny. Even so, Ms. King's starting salary was
low, and it increased only $6,000 in six years.
Well, you may say, times are tough. Yes, they are. Except
that her male peers were getting much bigger increases than she was during
those same "tough times." In fact, one male peer, who the company had
conceded was comparable in performance, was making about three times as much as
And it wasn't just the plaintiff, either -- almost all of
the female business managers had low starting salaries, and got smaller
increases without necessarily worse performance.
The company claimed that the women started lower because
they had less education and less relevant work experience. Sounds reasonable?
Maybe . . . except that, as the court pointed out, even
though less education and experience might explain a lower starting
salary, it doesn't explain why she's continuing to get paltry annual increases
after she's come in and shot the lights out . . . while the dudes, who
aren't any better, are raking it in.
The burden of proof was on the employer to, uh, prove
that education and experience were in fact the reasons that the women did so
poorly. It didn't help that the guy who set the salaries testified in his
deposition that the process was "subjective" and refused to
The court said that Ms. King should have the
opportunity to prove that the employer's explanations for the pay
disparities "were just smokescreens."
baby. Very ouch.
In one last desperate move, the employer argued on appeal
that the selection of pay rates was not discriminatory because it
was "random." NOTE TO EMPLOYERS: When you have to make this
argument, you might as well get out your wallets. Of course, the Court
slapped that one down, too. The Court said that, although "random"
doesn't equate to "discriminatory," one would expect truly
"random" salaries to sometimes give women the advantage. In this
case, the women almost all did significantly worse than almost all of the men.
So, Doctor, how shall we avoid this employer's fate?
First, employers should conduct preventive
compensation audits to find problems like this and fix them before they become
"issues." Once a year is ideal. Less often isn't as
good, but anything is better than nothing, as long as you fix the problems
Second, consider doing all pay increases for
employees in a given job category at the same time each year,
rather than doing them on individual employees' anniversary dates. If you're
doing them all at the same time, you will be much more likely to notice without
even trying that Jane is getting a pittance in relation
to John, so you can take whatever remedial steps are necessary. If you use
anniversary dates, be sure you make the extra effort to compare the employee
with his or her peers.
Third, be fair across the board. The
King case focused on discrimination against women. Sometimes we find
that a white male is paid less than it seems he should, compared with his
female or minority peers. Even if the person who deserves more money is a white
guy, don't hesitate to do the right thing and get him where he needs to be.
Sometimes the government looks for "reverse" discrimination, too. Which,
we all know, is also illegal.
Visit the Employment and
Labor Law Insider for additional insights from Robin Shea, a partner with the national labor and
employment law firm Constangy, Brooks & Smith, LLP.
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