HR Webinar: Gender Pay Equity: The Time is Now

Gender Pay Equity:
The Time is NOW!
April 11, 2019
Bob Greene

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Today’s Speaker
Bob Greene currently serves as Channels Manager and Sales Trainer at Ascentis.
Bob’s 39 years in the human capital management industry have been spent
in practitioner, consultant and vendor/partner roles. As practitioner, he managed
payroll for a 5,000 person bank in New Jersey. As consultant, he spent 8 years
advising customers in HRMS, and payroll and benefits system design as well as
acquisition strategies. Bob also built a strategic HCM advisory practice for Xcelicor
(now Deloitte Consulting.)
As vendor/partner, he has had prominent roles in sales support, marketing and
product management at several companies and currently Ascentis. Bob has been
a Contributing Editor for IHRIM's Workforce Solutions Review journal, for the past
eight years. His experience also includes two years as Adjunct Lecturer in HRIS at
Benedictine University in Lisle, Illinois. In addition to his 39 years of experience,
Bob also holds a BA in English from Rutgers University.
Bob Greene

Agenda
• Part I: “Mind the Gap!”
• “April 2, 2019”
• The Most Stubborn Trend in Recent Economic History?
• “Ancient” Origins: The Equal Pay Act of 1963
• Part II: The Last Ten Years
• What the Federal Government Has….and HASN’T Done
• States and Localities Step In
• 2016: Four States Lead the Way!
• 2019: Has the Fed Been “Woke?:” Judicial Intervention and H.R. 7
• Part III: How an HCM Suite Can Address the Problem
• HRIS
• Performance/Compensation Planning
• Learning Management
• Workforce Analytics
• Steps Every Employer Should Take NOW!
• How Ascentis Can Help

Part I
“Mind the Gap!”
Remember: Ginger Rogers Did Everything Fred Astaire Did….
….But She Did It Backwards and in High Heels….
.…and for 59% of Fred’s Salary. (Astaire: $211,666; Rogers: $124,770)

Part I
“Happy Equal Pay Day!”
What is “Equal Pay Day?”
• It’s the specific day of the year
when the average man in the
United States must begin work,
to earn the same amount for the
year, as the average woman, in
the same job, who began work
on January 1.
• For 2018, it was April 10.
• For 2019, it is April 2.
• Progress?
/9

The Most Stubborn Trend in Recent Economic History
According to the Institute for
Women’s Policy Research:
• Since 1980, when weekly earnings data
were first collected, the weekly gender
earnings ratio has risen from just 64.2
percent to 81.1 percent now. (81.8
percent last year, so regression in the
last 12 months.)
• Most of the progress toward gender
equality took place in the 1980s/1990s.
• In the past ten years (2009 to 2018),
the gender wage gap narrowed by less
than one percentage point, compared
with 3.4 percentage points in the
previous ten years (1999 to 2008), and
with 6.3 percentage points in the ten
years prior to that (1989 to 1998).
Source: The Institute for Women’s Policy Research, The
Gender Wage Gap, 2018 Earnings Differences by Race and
Ethnicity; published March 7, 2019. Can be accessed here:
https://iwpr.org/publications/gender-wage-gap-2018/

The trendline for the
change in the gender pay
equity gap:
• Practically “defines” the phrase
“one step forward; two steps
back!”
• Bear in mind that a positive
number on this graph
represents progress narrowing
the wage gap, and the trend
line (orange dots) represents a
slowing of that narrowing.
-1.5
-1
-0.5
0
0.5
1
1.5
2
2.5
1986 1991 1996 2001 2006 2011 2016
Year on Year Change in Gender Pay Gap (Pct)
The Most Stubborn Trend in Recent Economic History

Part of a Much Larger Discrimination Trendline…
According to the Institute for
Women’s Policy Research:
• The larger trend on which the
gender gap aligns is the combined
race/gender pay gap in the USA.
• On this table, we see the gender-
only gap mapped against the gap
measured by each group’s earnings
compared to white males.
• While beyond the scope of this
session, the trend is nevertheless
informative.

Gender Pay Disparities…By The Numbers
According to the American
Association of University
Women:
• The top ten occupations where
women collectively lose the
most money due to the Gap are
listed on the left.
• These ten occupations alone
represent a total earnings gap of
more than $134 billion.
Source: American Association of University Women,
The Simple Truth About the Gender Pay Gap;
Can be accessed here:
https://www.aauw.org/research/the-simple-truth-about-the-gender-pay-gap/

Women:
• The ten largest occupations for
women carry some “legacy bias”
with them (nurses, “secretaries,”
elementary and middle school
teachers).
• However, at 90.4% - 92.0% pay
ratio, these three largest female-
dominated occupations are
generally LESS impacted by the
gender equity gap.

Women:
• The ten occupations with the
largest individual pay gaps are
listed to the left.
• Notice the tendency for the 3
occupations where the gap is
greater than 36% to cluster
around the discipline of financial
management.

Women:
• The ten occupations where
women collectively lose the
least money due to the Gap are
listed on the left.
• Notice the one occupation
where women, on average earn
MORE than men, is buyers and
purchasing agents.

“Ancient” Origins: The Equal Pay Act of 1963
“No employer having employees subject to any provisions of
[section 206 of Title 29 of the United States Code] shall
discriminate,… between employees on the basis of sex by paying
wages to employees in such establishment at a rate less than the
rate at which he pays wages to employees of the opposite sex in
such establishment for equal work on jobs[,] the performance of
which requires equal skill, effort, and responsibility, and which are
performed under similar working conditions, except where such
payment is made pursuant to (i) a seniority system; (ii) a merit
system; (iii) a system which measures earnings by quantity or
quality of production; or (iv) a differential based on any other
factor other than sex.”
The Equal Pay Act of 1963 (P.L. 88-38)

Amendments to the EPA within its first few years of life included:
• The “Bennett Amendment” which was incorporated via Title VII of the Civil Rights Act of 1964, to codify
into the law the four pay differential “affirmative defenses:” seniority, merit, productivity, or any
other factor other than sex.
• Title VII also expanded coverage for the EPA to more employers, by applying it to virtually all
employers with 15 or more employees, regardless of whether they were engaged in interstate
commerce or had gross annual revenues in excess of $500,000 (the FLSA coverage determination).
• The EPA, originally, did not cover most “white-collar” professions, e.g., executives, administrators,
outside salespeople, and other professionals (because the FLSA does not cover them), but this was
corrected 9 years later with passage into law of the Education Amendments of 1972.

Significant Court Cases Challenging/Clarifying the Law:
• Schultz v. Wheaton Glass Co., (1970; USCA Third Circuit)
• The Court ruled that jobs must be "substantially equal" but not "identical" to fall under the
protection of the Equal Pay Act.
• So, for example, an employer cannot change the job titles of women workers in order to pay them
less than men where the content of the job description is substantially equal.
• Corning Glass Works v. Brennan, (1974; US Supreme Court)
• The US Supreme Court ruled that employers cannot justify paying women lower wages because
that is what they traditionally received based on the "going market rate.“
• A wage differential imposed "simply because men would not work at the low rates paid women"
for the same work was no longer acceptable.

After 30 years of relative inaction, enter Ms. Lily Ledbetter:
• Ledbetter v. Goodyear Tire & Rubber, (550 US 618; 2007)
• Ledbetter sued for gender discrimination under Title VII, alleging the company had given her a
lower salary due to her gender. The trial jury found for Ledbetter, awarding her more than $3.5
million, which the district judge reduced to $360,000.
• After a series of appeals, the US Supreme Court ruled, by a 5-4 majority, that Ledbetter’s claim was
time-barred by the 180-day statute of limitations contained within Title VII. They rejected
Ledbetter’s contention that each new paycheck she received was an act of pay discrimination, but
rather that the statute tolled from the date of the last pay change decision made by Goodyear.
• In a somewhat prescient statement, Justice Ginsburg, writing for the
dissent, suggested that … “the Legislature may [want to] act to correct
this Court’s parsimonious reading of Title VII.”
Source: Oyez; Ledbetter v. Goodyear Tire & Rubber Company. Can be accessed here: https://www.oyez.org/cases/2006/05-1074

2009 represented the first year since 1994 that there was a
Democrat-controlled House, Senate and Presidency.
• The Lily Ledbetter Fair Pay Restoration Act
• …was the first bill signed into law by incoming President Barrack Obama.
• It made each new paycheck issued by an employer a potential further act of gender pay
discrimination, effectively negating the 180 day Title VII statute of limitations for gender-
based pay disputes.
• Interestingly, at the time, the Society for Human Resource Management (SHRM) publicly
opposed the new law.
• As a result of Lily Ledbetter, employers MUST increase their vigilance regarding
documentation around pay decisions – how they are made, on what factual basis, etc.
• An automated Compensation module as a “forever repository” for this information,
including, for example, a regression analysis reflecting documented relationships between
merit increase decisions and the performance records on which they were based, can be
extremely important in this regard.
The Lily Ledbetter Fair Pay Restoration Act (P.L. 111-2)

One of the biggest impediments to achieving gender pay equity (whether
by intention or “side-effect”), are compensation non-disclosure rules
implemented by many private employers.
• In April, 2014, then-President Obama signed two Executive Orders:
• EO 13665 (“Non-Retaliation for Disclosure of Compensation Information”), bans federal
contractors from punishing workers who discuss salaries with co-workers, and is still in effect.
• EO 13673 (“Fair Pay and Safe Workplaces”), mandated that certain details be included on
employees’ paychecks, as well as mandating reporting of certain pay equity data to the
federal government. This executive order was voided by the Trump administration
in March, 2017.
• Remember that Executive Orders, unlike legislation, can only impact federal
contractors, not all private employers across the nation. So this is “slight”
progress…
Federal Action….And Inaction
2014: Two Executive Orders

Efforts at broadening the prohibition on compensation non-disclosure
rules from federal contractors to private employers generally have not
been successful (at the federal level.)
• Three separate “Paycheck Fairness Act” bills have originated in Congress but have
never made it out.
• Bills in the last Congress were H.R.1869 and S.819, introduced in April, 2017,
expired December, 2018.
• And then we had an election in November, 2018, and the House changed parties.
• …still, for now, private employer rules specifying that discussing compensation
with anyone other than an employee’s supervisor or HR is prohibited and subject
to sanction up to and including termination of employment, are presumptively
legal, except for federal contractor employees….and except in certain states,
counties and cities (more on that shortly.)
The “Paycheck Fairness Act” … Defeat, defeat, defeat…

In 2016, the EEOC announced a major revision to the annual EEO-1 report
which most employers have been filing for decades.
• The revision will add annual pay data, in 12 graduated bands of total
compensation, to the report. It will also add hours worked information, broken
out by exempt and non-exempt FLSA job classifications. This is known collectively
as “Component 2” data.
• Obviously, this information would strengthen the ability to diagnose pay equity
and gap information (since gender is already collected) and, using big data
manipulation, easily pinpoint specific industries and jobs that suffer more from
gender pay inequality than others.
• In August, 2017, on the basis of new Administration mandates to reduce
paperwork and administrative burden, the EEOC announced that the new EEO-1
report and collection of pay range data would be suspended indefinitely.
• And then, on March 4, 2019, a federal district court judge changed everything.
A New EEO-1 Report? Yes…No….Yes…

• September 29, 2016: EEOC publishes revisions to the EEO-1 report to add Component 2 data
(salary bands and hours worked information). Component 2 requires reporting salaries in 12 pay
bands, distributed by the existing 10 job classifications, and broken down by race and sex.
• August 29, 2017: EEOC Acting Chair Victoria Lipnic, in consultation with Office of Management
& Budget, issues an immediate stay of Component 2 reporting requirements, calling it a violation
of the Paperwork Reduction Act (“PRA”). This stay was to be effective for the first Component 2
reporting period of 2017 (filing by March 31, 2018.)
• November 15, 2017: National Women’s Law Center sues EEOC, OIRA (Office of Information &
Regulatory Affairs) and OMB to reinstate the Component 2 reporting requirement.
• March 5, 2019: DC Federal Circuit Court Judge Tanya S Chutkan rules for plaintiffs NWLC and
against the Administration, stating that defendants failed to prove that the reporting requirement
would “meaningfully increase the burden on employers” (therefore failing to prove a PRA
violation.) The Judge gives the defendants one month (until April 3) to respond with a plan for
employers to meet the newly reinstated Component 2 reporting requirement.
• March 18, 2019: With the new reporting rules pending, EEOC opens its annual EEO-1 reporting
portal for Component 1 reporting, with a deadline for employers of May 31, 2019.
• April 3, 2019: EEOC responds to DC Circuit Court with plan to reinstate Component 2 reporting
requirement with separate deadline of September 30, 2019.
EEO-1 “Component 2” Reporting: A Timeline

Component 2 Data Sample Reporting

“Ban the Question”
Salary History Inquiries Prohibited!
• In an attempt to “break the cycle” of gender-based pay inequity, states and cities
are recognizing that certain common recruitment practices, even if innocent in
intention, can be discriminatory in impact.
• If an employer makes it a policy to simply offer a standard escalator (say, 5% or 8%)
above the candidate’s current salary, to their successful candidates, then if the
19.5% pay gap is statistically present in their candidate pool, that policy, in practice,
guarantees perpetuation of the same gap for their new hires.
• “Ban the Question” jurisdictions want to enforce a different approach:
(a.) employers should decide on a range that the job should pay,
(b.) they should then base the specifics of an individual candidate’s offer within that range on
their expertise and experience, and
(c.) make questions about salary history off-limits in the recruiting process.
States, Counties and Localities Step In

States and Territories Adopting This Law (as of March, 2019):
• California (eff. 1/2018),
• Connecticut (eff. 1/2019),
• Delaware (eff. 12/2017),
• Hawaii (eff. 1/2019),
• New Jersey (applicable to state agencies only, eff. 2/2018),
• New York (applicable to state agencies only, eff. 1/2017),
• Oregon (eff. 1/2019),
• Massachusetts (eff. 7/2018),
• Vermont (eff. 7/2018),
• Washington (eff. 6/2018)
• Puerto Rico (eff. 3/2018).
Bucking the trend, two states – Michigan and Wisconsin – have enacted state laws PROHIBITING
municipalities within those states from implementing salary history bans.

Cities and Counties Adopting This Law (as of March, 2019):
• San Francisco, CA (eff. 7/1/2018; also prohibits release of employee salary
information to third parties without their consent),
• Chicago, IL (applicable to city departments only, eff. 4/2018),
• Louisville, KY (applicable to city agencies only, eff. 5/2018),
• New Orleans, LA (applicable to city departments only, eff. 1/2017),
• New York City (eff. 10/2017),
• Albany County, NY (eff. 12/2017),
• Westchester County, NY (eff. 7/2018),
• Pittsburgh, PA (applicable to city agency employees only, eff. 1/2017).
• Philadelphia, PA passed a similar law, but it has been struck down by the
courts on First Amendment grounds. As a result, employers may ask about
salary history, but may not use it in employment-related decision making.

Pay Secrecy Laws
If asking candidates about their salary history, and then making “pre-
fabricated” salary offers on that basis enables employers (whether
intentionally or inadvertently), to perpetuate gender-based pay
equity gaps, the companion practice that many states are viewing just
as negatively is pay secrecy policies enforced on employees once
they’re in the door.
• Many employers have strict employment policies prohibiting employees from
discussing with each other any aspects of their compensation packages – with
penalties ranging from disciplinary action to termination of employment.
• Since these policies are seen by those advocating gender pay equity reform as
helping to keep employees from determining when they are being impacted
by such pay gaps, a number of states have passed laws invalidating these
policies for both public and private employers within their boundaries.

Pay Secrecy Laws
Michigan led the way on this type of law, in 1982. The law prohibits
employers from doing any of the following:
• requiring, as a condition of employment, non-disclosure by an employee of
his or her wages;
• requiring an employee to sign a waiver or other document which purports to
deny that employee the right to disclose his or her wages; and/or
• discharging, formally disciplining, or otherwise discriminating against an
employee for job advancement on the basis of having disclosed his or her
wages.

Pay Secrecy Laws
California passed a similar law in 1985. Between 2000 and 2019 (so far), 16 additional
states and the District of Columbia passed “anti-pay secrecy laws:”
• Colorado,
• Connecticut,
• Delaware,
• Hawaii,
• Illinois,
• Louisiana,
• Maine,
• Maryland,
• Massachusetts,
• Minnesota,
• Nevada,
• New Hampshire
• New Jersey,
• New York,
• Oregon, and
• Vermont.

2016: What If Four States Had a Race…And Gender Pay Equity Won?
In 2016, California, Maryland, Massachusetts and New York “competed”
in overhauling their employment laws to create some of the most
aggressive gender pay equity standards ever seen in this country.
• And bear in mind, that while these four states represent only 8% of the states in
the country numerically, they also represent almost a quarter (22.33%) of all US
residents.
• California’s new Fair Pay Act was the most extensive in its reach, and revised
terms of that state’s existing equal pay laws that included:
• Permitted/required bases of pay comparison between individuals
• Permitted reasons for differentials
• Pay transparency/anti-secrecy provisions
• Records retention, and
• Enforcement

2016: What If Four States Had a Race…And Gender Pay Equity Won?
Source: Seyfarth Shaw, The New U.S. Pay Equity Laws: Answering the Biggest Questions. Created by Seyfarth’s Pay Equity Group
Can be accessed here: http://www.seyfarth.com/dir_docs/publications/payequitybrochure.pdf
Significant innovations in the 2016
class of new state pay equity laws:
• Lowering of evidentiary standard to eliminate
intent. De facto pay discrimination is still
discrimination.
• For comparison groups, watch for descriptors
of “equal”, “similar” and “substantially
similar”–they are NOT the same.
• Lowers the bar on required remediation from
“statistically significant groups” to entire
wage differential.
• For some states, gender AND gender identity
are included as bases.

On November 6, 2018, the House of Representatives changed hands, with
the Democrats taking a 38 seat majority (currently).
• As part of this new majority, 102 of 435 seats are held by women, a historical high
of 23.4% of Congress. Shortly thereafter, the Speaker’s gavel was turned back over
to a Congresswoman.
• On January 30, 2019, Rep. Rosa DeLauro (D-CT-3) introduced the Paycheck
Fairness Act of 2019 and on March 27 it was engrossed (initial final copy published
in the House of Representatives).
• The law amends the Fair Labor Standards Act of 1938 (FLSA) to strengthen gender
pay equity provisions, many of which have not previously been amended since the
Equal Pay Act of 1963 was originally passed into law.
• The bill also takes the opportunity to finalize, and commit
to national standards, a number of regulations and laws that
have been gaining popularity among the states.
Federal Inaction….And Action? (Part Deux)
The “Paycheck Fairness Act of 2019”

On November 6, 2018, the House of Representatives changed hands, with
the Democrats taking a 38 seat majority (currently).
• The four most prominent provisions of the bill include:
• Strengthening the protections of the Equal Pay Act by limiting the impact of the “Bennett
Amendment” – thereby restricting the application of the “bona fide factor” defense in
justifying pay disparities (§3(a)).
• Introducing a new non-retaliation provision relating to employee discussions of compensation
– making nationwide the laws of 19 states and territories as of March, 2019 (§3(b)).
• Formalizing and passing into law the requirement for compensation band reporting to be part
of the EEO-1 report (§8).
• Introducing a formal, nationwide prohibition on asking applicants about wage, salary or
benefits history, to attempt to curtail the perpetuation of current pay gaps – making
nationwide the laws of 8 states as of March, 2019 (§10).
Federal Inaction….And Action? (Part Deux)
The “Paycheck Fairness Act of 2019”

California has tried a more “organic” approach to gender diversity, trusting the
theory that greater gender diversity on public companies’ Boards of Directors
will yield better equal pay policies.
• On September 30, 2018, Governor Jerry Brown signed into law SB-826, which mandates
gender diversity on the Boards of Directors of public corporations incorporated in California.
• Although other states, like Colorado, Illinois, Massachusetts, Pennsylvania and Ohio, have
passed non-binding resolutions encouraging gender diversity on public corporations’
Boards, California is the first state to give such a provision the force of law.
• SB-826 applies to all publicly traded corporations that are incorporated within California, or
that are foreign (e.g., incorporated in Delaware) but headquartered in California. The new
California law requires that:
• By the end of 2019, each publicly traded California corporation must have at least one female director
• By the end of 2021, each publicly traded California corporation must have:
• three female directors if the total number of directors is six or more
• two female directors if the total number of directors is five
• one female director is the total number of directors is 4 or fewer
And More State Developments
California Mandates Gender Diversity on Boards of Directors

On December 20, 2018, the Clark County Board of County
Commissioners appointed two women to fill vacated seats in the
Nevada state legislature.
• The resulting gender balance across the state’s two houses was 50.8% female,
49.2% male.
• To this point, no state has ever had a female majority, according to experts at
the Center for American Women and Politics at Rutgers University.
• In 2019, women-held seats will grow to at least 28.6 percent in state
legislatures, up from the current level of 25.4 percent, according to data from
Rutgers.
• The proportion of women in state legislatures has historically remained
between 23 and 25 percent.
And More State Developments
Nevada Achieves a Different “First in the Nation” Status

Part III
How an HCM Suite Can Address the Problem

Basic HRIS
What to Expect From Your HCM System

Compensation Planning Module

Compensation Planning Module
“The
Boys”
“The
Girls”
Ideal (Compliant) Regression Line

Learning Management Module

Workforce Analytics

1. Understand appropriate job groupings.
• The key to detecting de facto pay discrimination is to recognize where the content of
two or more jobs, even though they may have different titles, is essentially similar or
identical.
2. Evaluate permitted factors that explain pay differences.
• These can vary by state.
• Each employer can begin by deciding whether to comply on a state-by-state basis, or
to comply with the most restrictive standard applicable to all states in which they do
business.
• Generally, most states consider the following to be permitted pay differential factors:
• seniority,
• merit,
• production quantity or quality,
• or other bona fide factors (other than gender), such as education, training or experience.
Five Key Steps to Address Gender-Based Pay Inequality
Steps Every Employer Should Take NOW!

3. Analyze pay.
• Use regression analysis to determine the extent to which pay differences are explained by
permitted factors, such as performance or experience, vs. impermissible factors, such as
gender or race.
4. Offer managerial and supervisory training/re-training.
• Consider requiring key supervisors (i.e., those responsible for making salary change or bonus
award recommendations) to review this training annually, and/or prior to each merit or bonus
distribution cycle.
5. Modify policies.
• From employee handbooks to separate statements of compensation practice, and in addition
to reiterating the employer’s commitment to gender-blind pay equity principles, these policies
should, for example, remove all reference to prohibitions on employees disclosing their
compensation to others.
• Best practice would strongly suggest that these policy modifications be made corporate-wide
rather than trying to implement and enforce different policies for employees working in
different states.
Five Key Steps to Address Gender-Based Pay Inequality
Steps Every Employer Should Take NOW!

How Ascentis Can Help
The Ascentis HCM Suite Has Many Capabilities to Address This Challenge
• Human Resource Information System
• Configurable Interview Guides in Recruiting (to facilitate compliance with “Ban The Question” laws)
• Manager Self-Service for Compensation Change Requests
• Documentation Fields to Record Pay Differential Explanations
• Policy Acknowledgements and Historical Tracking
• Compensation Planning
• Merit and Bonus Planning Matrices (Think Automation of Those Excel Spreadsheets You’ve Been
Using, and the Data on Them Won’t Get Stale Anymore!)
• Interactively updated Pay-for-Performance Dashboard
• Realtime Analytics Including Gender Pay Equity Progress
• Learning Management System
• SCORM and AICC compliant and fully integrated with the HRIS.
• “SCORM-Lite” upload capability can be used to shortcut the process of moving content from the
printed page (.pdf, .doc, .ppts) into the LMS
• Optional Pre-fabricated Compliance content on subjects like Equal Pay Act and Diversity

Learn more
Request an assessment of your organization’s Gender Pay Equity positioning today!

Contact Us
webinars@ascentis.com
info@ascentis.com
www.ascentis.com
800.229.2713

HR Webinar: Gender Pay Equity: The Time is Now

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