One-dollar-bill-001.jpgBy Christine Hendrickson and Annette Tyman

On today’s 50th anniversary of the signing of the Equal Pay Act, President Obama reiterated that pursuing equal pay for all remains at the forefront of the administration’s agenda. During his second inaugural address, President Obama said: “We, the people, declare today that the most evident of truths – that all of us are created equal – is the star that guides us still … It is now our generation’s task to carry on what those pioneers began. For our journey is not complete until our wives, our mothers, and daughters can earn a living equal to their efforts.” Today, President Obama’s message remains the same, “[U]ntil equal pay truly is a reality, we’re also here to recommit ourselves to the work that remains to be done.”

President Obama’s focus on pay equity has echoed throughout the agencies charged with enforcing the nation’s equal pay laws. Today, the White House Equal Pay Task Force announced the administration commitment to “closing the gap – once and for all.” In its “Fifty Years After The Equal Pay Act” publication, the White House announced that 2013 and beyond would include a focus on a “broader framework of practices that may limit the full economic participation of women workers.” The Task Force identified three specific practices to target: (1) occupational segregation and barriers that exclude women from traditionally male dominated occupations; (2) the overlay of discrimination based on race, ethnicity and gender in compensation; and (3) addressing the wage gap for mothers and caregivers. The White House also launched a website with information about “Your right to equal pay and how to exercise it and what the administration is doing to close the gender wage gap.” 

Employers are wise to pay attention to the direction given by the administration. Although there were no substantive changes in the announcements today, they represent a continued commitment to pay equity issues – a commitment that is felt throughout the agencies. For instance, the EEOC has woven its promise to combat pay discrimination into its Strategic Enforcement Plan (“SEP”), which set “enforcing equal pay laws” as one if its six national priorities through 2016. The SEP expressly “encourages the use of directed investigations and Commissioner Charges to facilitate enforcement.” There is already anecdotal evidence that the EEOC is putting the SEP into action by proactively pursuing compensation audits without a charging party or a victim of alleged pay discrimination coming forward. Likewise, the OFCCP recently rescinded guidelines that it believed were “restricted” in favor of a new “fact specific case-by-case approach” to investigating fair pay for all.  

The good news for employers is that fairness in pay is one area in which early detection and intervention can reduce and/or eliminate an employer’s risk.    

  • Get Proactive About Pay Equity: Conducting a proactive pay equity analysis is the first and best step employers can take to ensure fair pay and diminish legal risk. Even when employers are acting proactively, it is still critical for them to take steps to avoid putting the company at unnecessary risk. Any analysis should be conducted with the advice of counsel and under the attorney-client privilege. During this process, it is important to understand the factors that truly impact pay. 
  • Have A Plan To Fix Unexplained Disparities: If you find unexplained differences after a thorough privileged investigation, have a plan for making any necessary adjustments to compensation. Due diligence is required to ensure that changes are fairly administered. 
  • Review Your Compensation Policies And Practices: Ensure that your practices comply with your written policies. If you say that you are a pay-for-performance organization, ensure that your compensation practices support your compensation strategy.    
  • Consider Beefing Up Sponsorship Programs: Sponsorship and mentorship programs may be a critical piece to ensuring pay fairness in the workplace. Employers who fail to correct perceived or actual disparities in the availability of sponsorship opportunities for women become targets for employment discrimination litigation. Differences in rates of sponsorship can also have an impact in pay so employers are wise to take a harder look at their sponsorship and mentorship programs. While creating new sponsorship and mentorship programs targeted at HiPo women can be highly effective, employers should be careful before jumping to implement these programs. Sponsorship programs aimed only at HiPo female talent should be undertaken only when the employer is correcting a “manifest imbalance” of women at the company, or at certain levels or certain departments within the company, and then only when the program is intended to be a time-limited and targeted fix. Determining whether there is a “manifest imbalance” is tricky and legally risky, and is best undertaken with the advice of counsel.