When can you pay someone less for equal work? When they earned less before…

I just learned that the 9th U.S. Circuit Court of Appeals ruled yesterday that you can pay an employee less than another who is doing the same work, simply because they earned less in the past. Actually, the ruling was specific to a woman who earned less; but really, this has implications to anyone who earns less on a prior job – not just women.

Think about it – have you ever taken less salary to have better benefits? What about a better work-life balance? What if you worked in a location that had a lower cost of living (which is actually what seems to have happened in this case)? Did you think that those decisions/situations might impact your salary for the rest of your life? Probably not.

We all like to think that we get paid appropriately for the work that we do. However, this is very situational. You might want more to work in a fast-paced environment. Or, maybe less if they offer you a rich pension plan or more paid time off.

In this case, the court is saying that it is okay for an employer to allow a lower rate of pay to follow you around for the rest of your life (unless someone smarter realizes the injustice and decides to be more equitable).

I know that we’re dancing on a very fine line here – especially when it comes to quality of work and pay for performance. Do I like Bob’s work better than John’s because Bob and I are friends? What if Bob and I communicate well, but John and I do not. When is there bias in the decisions? We cannot often tell, nor are we always aware that we are being biased in these situations. So, we need to be careful in these valuations. But this decision does not take any variations of cost-of-living or total compensation into account, which seems very unfair.

This ruling is being sent back to U.S. Magistrate Judge Michael Seng for consideration. This judge previously decided that this behavior was grounds for bias. I ask you to think about what would happen if this happened to you, even if you are not female? Would you accept this if you found out another worker earned more just because s/he earned more in a previous job?

I hope this does end up in a higher court, as I have a hard time believing anyone would accept “prior pay” as a reason to pay someone less for very long. Seniority (years of experience), merit, quality or quantity of work all still sound reasons to differentiate pay (assuming you have as little bias as possible in the assessment). Good employees know they will be in demand, and will not tolerate discrimination for long. If possible, they will go to the smarter employer who will pay them what they deserve.

Let me know your thoughts on this topic…

Is Google still searching for gender pay equity?

You may have seen that the Department of Labor is going after Google for “extreme” gender pay discrimination. You can read the latest Google response via a blog post here.

So what’s happening and why does this matter?

Keep in mind that tech companies are especially notorious for gender hiring and pay issues. Many articles have addressed the ongoing struggle to keep women in technology-related jobs, and there is even a website/network dedicated to women empowering others in these roles: www.womenintechnology.org

Since the technology field is already dominated by men, it is only natural that there exists a potential for bias, either deliberate or unconscious, against others “not like me,” including gender and race/culture. Google’s own published workforce statistics for their technology jobs support some of this behavior:

Google

Yes, Google’s tech workforce is 81% male and 57% white. That compares to the US averages of 49.2% male and 61.6% non-Hispanic, white in the 2015 data.  Note that the Google ethnicity above shows their tech workforce is 37% Asian, whereas the US average in 2015 is 5.6% Asian, so that is skewing the white percentages down quite a bit.

So why does this matter? Can’t Google hire who they want and pay their employees what they want?

Well, no, they cannot. Google is a Federal contractor, so they are subject to the pay practice rules of the OFCCP (Office of Federal Contract Compliance Programs), which requires Federal contractors “take affirmative action to ensure that applicants are hired and employees are treated during employment without regard to race, creed, color or national origin.” Gender was added in 1967, but apparently it takes more than 50 years to get the task accomplished!

It also matters because Google is a household name – it is even the verb we use for searching for something online! So, Google should know that they are a huge target for any compliance concern. They should be preemptively monitoring their HR practices and procedures for any potential issue, but apparently they were behind on that front.

The initial charge from the OFCCP/Department of Labor was for gender pay discrimination from 2014 to 2015, and the suit was filed in court in 2016. Note that in the Google blog post cited above they note “In late 2016, we performed our most recent analysis across 52 different, major job categories, and found no gender pay gap.” Is that too late? What about 2015 data? Looks like they still have a legal issue from that time frame.

I do appreciate that Google has published their compensation process online here: https://rework.withgoogle.com/guides/pay-equity/steps/introduction/. This is a valuable resource for other employers to use in their own compensation strategies. The blog post also notes that Google “recently expanded the analysis to cover race in the US.” That makes me cringe, because they actually should have been considering race before they were required to consider gender in pay equity issues, according to the OFCCP rules.

Lessons Learned

There are some lessons for all HR/Compensation managers from all of this:

  • Have a compensation philosophy and use it as your mantra
  • Define your jobs/requirements and classify them accordingly
  • Stick to your structure and try to prevent outliers
  • Assess your overall data at least annually and make adjustments where needed
  • Push back on hiring managers when you see bias in hiring/compensation decisions, where appropriate

These are not easy steps for HR – we are often already considered the bureaucracy/red tape. However, this is one front that is worth pushing back on and your legal team will thank you when you can defend your decisions in court (and can back them up with the statistical data as evidence).