Pay transparency win in US, just in time for Equal Pay Day

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In a landmark decision earlier this month, a US federal Judge has reinstated an Equal Employment Opportunity Commission initiative to collect employee pay data broken down by gender, race and ethnicity.

For decades, the US Equal Employment Opportunity Commission (EEOC) has collected job titles broken down by sex and race each year from companies with 100 or more employees. The new expanded requirement includes pay data and hours worked across 12 salary bands. Advocates argue pay data collection is necessary to identify and combat wage gaps caused by discrimination.

The decision comes at a time when global pressure for organisations to demonstrate fair pay practices is at an all-time high.

Maya Raghu, senior counsel and director of workplace equality at the National Women’s Law Center, said she hopes the data collection will motivate employers to correct pay disparities and end practices such as basing employees’ salaries on what they made in previous jobs.

Vast racial and gender wage gaps persist in the United States. All gender, racial and ethnic groups, with the exception of Asian men, lag behind white men in median hourly earnings. According to a Pew analysis, in 2018, women earned 89 percent of what men earned.

According to the EEOC, human resource practices that involve managers, increase market transparency, and are underpinned by external regulatory or market uncertainty reinforce goals. Here are three recommendations from the EEOC:

  • Increase representation of protected groups in senior roles. This will lead to stronger implementation of equal opportunity policies and higher employment of protected groups.

  • Make manager’s hiring decisions accountable and transparent. This will increase representation and influence more equal pay for protected groups.

  • Offer mentoring programs with senior managers. They are often effective in increasing representation of protected groups.

Identifying Systemic Bias

When the EEOC was founded in 1965, most discrimination and segregation was explicit and easy to identify. Today, discrimination can be more subtle, produced by implicit bias and often not clearly apparent to either the perpetrators or targets. Consequently, efforts to stop and remedy discriminatory practices today cannot rely on identifying biased employers or discreet acts of discrimination.

Inclusive Mentorship

Part of closing the gender pay gap is making hiring and compensation decision-making processes more transparent, through initiatives like wage reporting. Making workplace processes more transparent raises the visibility of underrepresented groups and the work they do.

WERKIN supports more equitable and diverse workplaces through inclusive career development and mentorship programs. WERKIN changes who managers see, and how they manage by helping managers identify employees for projects based on skill and professional interests, not just who they see right in front of them.