In-House Counsel Can Start to Close the Gap on Equal Pay

This article was written by Caroline Spiezio for Corporate Counsel. The original article can be found at:

Four months into 2018, the average American woman will have finally caught up to the pay an average U.S. man earned by the end of 2017.

April 10 is Equal Pay Day, meant to remind Americans of the wage gap between men and women in the United States. On average, women earn 80 cents for every dollar earned by men, and that gap is even wider for black, Native American and Latina women.

And recent government-mandated salary disclosures in the U.K. show that the problem isn’t only in the United States. Facebook Inc. and Google are paying British women less or providing smaller bonuses than they give to men (the data also shows that some outside law firms in the U.K. are paying women less than men).

In-house leaders can help close that gap at their companies, but the question remains as to how they can best use their leverage to tackle this vexing problem.

Legal departments’ approach to the pay gap depends on company culture and in-house lawyers’ roles, says Nicole Buonocore Porter, a professor of law at University of Toledo College of Law and a former in-house lawyer.

“Some [lawyers] only see their role as risk avoidance, and then your goal with respect to equal pay and Equal Pay Act violations is narrower,” she said. “In companies that value diversity, in-house counsel serve a somewhat different and more important role. They’re not just seeing what’s an equal pay violation, because sometimes it’s hard to prove an Equal Pay Act violation, but seeing how can we get pay equity at the company.”

equal pay 2

In-house lawyers have an obligation to ensure their companies aren’t breaking any laws related to equal pay. An increasing number of states and cities have banned companies from asking about job applicants’ previous salaries, in an effort to prevent previous wage gaps from carrying over into new jobs.

These laws have only been implemented in a select number of jurisdictions, including New York City and the state of California. In Wisconsin and Michigan, the situation is reversed—companies can’t legally be banned from asking about previous salary.

“Companies may want to comply nationwide, even if they have employees where the laws have not been passed yet,” said Susan Gross Sholinsky, a member of Epstein Becker & Green’s employment, labor and workforce management practice. “A lot of companies are going out there and doing it on a public policy basis.”

Along with eliminating salary questions, Sholinsky says in-house lawyers can help companies establish pay bands for particular roles. That way, salary offers and changes will be aligned with clear metrics, like number of academic degrees or years of experience, rather than gut feelings that could contribute to pay discrimination. To comply with equal pay laws, she added, companies should also allow employees to discuss their salaries.

One of the most dramatic ways in-house lawyers can promote pay equity at work is through a pay audit. But Sholinsky and Porter warn that if pay gaps are found in the audit, the company will have to fix them—executives can no longer claim they didn’t know.

“Before you do a pay audit, you have to be comfortable to the extent that, if you reveal something that is unpleasant, you’ve got to do something about it,” Sholinsky said. “Because doing a pay audit, getting bad results and then not doing anything about it is worse than not doing an audit at all.”

Todd Sirras, the managing director of Semler Brossy Consulting Group, said legal departments can work with HR to analyze pay data and create a comprehensive report on salaries, factoring in location, performance reviews and other variables impacting pay. This report can then be passed to directors and executives, with a clear outline as to what is causing differences in pay, if they exist.

Such gaps are often found to be caused by variables other than bias, Sirras says, which is why he believes company leaders should be given a full picture rather than a raw unanalyzed set of data. But he said that if the data has been fully analyzed and shows pay discrepancies with all other factors being equal, the company can suffer if leaders don’t want to act on that information and implement a change.

“If I were the CEO I would want to know,” Sirras said. “The last thing I would want is to pick up the paper and see an analysis from someone else that I have a wage gap problem and I’m not doing anything about it. Figure it out now so someone doesn’t figure it out for you.”

Found via:

Leave a Reply