States continue to lead progress on fair pay, which includes equal pay for equal work, raising the minimum wage, and addressing all of the contributors to the gender and race pay gap costing women millions of dollars over their professional lives. In 2021, we saw the passage of bills prohibiting pay secrecy rules to ensure workers can discuss wages, expanding equal pay laws to include race and other protected classes, prohibiting employer inquiry into or reliance on salary history, and eliminating a sub-minimum wage for workers with disabilities, among others. We also saw exciting momentum at the Executive Level, including Executive Orders and agency action promoting equal pay.
Despite the existence of state and federal equal pay laws, women continue to earn less than their male counterparts in virtually every industry and economic sector and lose hundreds of thousands of dollars each year to gender and race-based wage gaps. Persistent inequality in earnings of working women, particularly women of color, translates into lower lifetime pay for women, less income for families, and higher rates of poverty. In fact, eliminating the gender wage gap would reduce the poverty rates of working women and their families by more than half.
The COVID-19 pandemic has further magnified the ways in which gender and race-based pay disparities put women, especially women of color, at higher risk of economic insecurity and contribute to higher poverty rates overall. Prior to the pandemic, women were already experiencing significant barriers to economic security and were more likely to live in poverty. Financial insecurity was especially pronounced for Black, Latinx, Native, Asian American, and Pacific Islander women. The current crisis is the first economic recession in which more women than men lost jobs, further exacerbating their already precarious financial situation. Therefore, passing strong equal pay laws is now more important than ever as the COVID-19 pandemic has underscored and exacerbated race and gender inequities and barriers in the workplace, especially unequal pay.
This year, advocates across the country have continued to push for equal pay laws that move us closer to achieving gender parity in the workplace and we have celebrated important wins. Rhode Island passed a comprehensive equal pay bill, S 270, which addresses pay discrimination in a number of important ways. First, it changes the standard from “equal work” to “comparable work,” which will enable fairer comparisons of work that better reflect the reality of the modern workplace. The bill also protects employees from retaliation for discussing their pay. Prohibiting “pay secrecy” policies will allow more workers to share what they are paid without fear of negative repercussions and enable them to uncover potentially unlawful gender or race-based pay disparities which are too often hidden from sight. S. 270 also expands equal pay protections to other protected classes in addition to sex, including race, color, religion, sex, sexual orientation, gender identity or expression, disability, age, and country of ancestral origin, thereby recognizing that workers often face intersectional pay discrimination because of both their gender and some other protected characteristic, such as race or ethnicity. Finally, the bill closes loopholes in employer defenses and increases the available relief for employees who experience pay discrimination.
In another important win, Nevada Governor Sisolak signed SB 293 into law in June 2021. This law prohibits an employer or employment agency from seeking or relying on the wage or salary history of an applicant for employment unless the applicant voluntarily chooses to provide this information. We know how pervasive this issue is and the fact that reliance on salary history in the hiring process harms women. Since women are systematically paid less than men in virtually every industry and occupation in this country, employers who rely on salary history to select job applicants and to set new hires’ pay tend to perpetuate existing gender- and race-based disparities in the workplace, allowing past discrimination to follow women from job to job. SB 293 confronts this nefarious issue head-on by prohibiting employers from asking about or relying on salary history to set the pay of new employees and is part of a growing trend in states and cities across the country to bar this practice. Importantly, preliminary research shows that salary history bans are having their intended effect of closing both gender and race-based wage gaps. SB 293 also increases pay transparency, which is critical to closing gender and race-based wage gaps, by requiring employers to provide prospective applicants with the wage or salary range for the position for which they are applying. Similarly, the bill requires employers to provide current employees the wage or salary range if the employees request it. Arming job applicants and employees with the wage range for a given position helps them to negotiate better wages for themselves.
In Connecticut, HB 6380 was signed into law with a similar goal of pay transparency in mind. This law requires employers to disclose salary ranges for vacant positions and to provide comparable pay for comparable work. Research shows that, when negotiating pay, women are more worried about backlash from their employers than men. Providing workers with information about the possible pay for a given position will enable them to negotiate better pay for themselves.
Another trend in the pay equity policy landscape is applying a “comparable pay for comparable work” standard. Mississippi (SB 2102), Indiana (HB 1011), and Connecticut (HB 6380) all introduced bills in 2021 which would have applied this standard. Although the Mississippi and Indiana bills failed, the Connecticut bill was enacted. In addition to requiring employers to disclose salary ranges for vacant positions, Connecticut employers are also now required to provide comparable pay for comparable work.
In addition to these recent wins, Kentucky (KY HB 35), New York (S 5598), Pennsylvania (HB 346), and South Carolina (S 514) all introduced legislation that would prohibit reliance on prior salary. While the Kentucky bill failed, the remaining pieces of state legislation are still pending.
An example of how states are targeting pay equity in government jobs is California Assembly Bill 316, which would have required the California Department of Human Resources to prepare a report on gender and ethnicity pay equity in each job classification where there is an underrepresentation of women and minorities. It would have required the report to contain a plan for each state agency to attain pay equity if a discrepancy is found, a plan to recruit, attract and retain women and minorities in positions where there is an underrepresentation of those groups, and each agency’s efforts toward meeting the goals for wage parity and increasing the representation of women and minorities. This measure stalled in the legislature but is part of a larger effort to demand employer accountability and transparency around the evaluation of pay, hiring, and retention practices. Employer audits not only help to uncover pay disparities, but can also reveal patterns of occupational segregation, a major contributor to the overall wage gap, and therefore prompt changes to recruitment, hiring, and promotion strategies to ensure better representation of women and people of color at all wage levels within companies.
California this year also addressed another type of unjust pay practice that has contributed for many years to the undervaluing of work performed by people with disabilities. SB 639 was signed into law in California and will end the practice of permitting employers to pay specified licensed employees with physical or developmental disabilities at a rate less than the minimum wage.
At the federal level, advocates continue to advocate for the passage of the Paycheck Fairness Act, H.R. 7. This bill would fill gaps in federal equal pay law by updating the federal Equal Pay Act (EPA) in several important ways to better combat wage discrimination on the basis of sex. It would prohibit employers from retaliating against workers for discussing or disclosing wages; limit employer inquiry into or reliance on salary history; modify the “same establishment” requirement to allow fairer comparisons of employees; and strengthen remedies for employees who have experienced pay discrimination. The bill also requires the Equal Employment Opportunity Commission (EEOC) and the Office of Federal Contract Compliance Programs (OFCCP) to train EEOC employees and other affected parties on wage discrimination. Finally, the bill would require the EEOC to collect employers’ pay data and other employment data broken down by sex, race, and national origin of employees to strengthen enforcement of our equal pay and anti-discrimination laws.
The PFA passed the House on April 15, 2021, but failed to pass a procedural vote to move forward to debate in the Senate on June 8. Despite this setback, Equal Rights Advocates and pay equity advocates across the country will continue to advocate for this common-sense legislation which would provide women with the tools to uncover and challenge pay discrimination-free from retaliation and prevent employers from perpetuating persistent inequalities. The time is now for comprehensive federal legislation to ensure that women in all parts of the country are paid fairly for their work and able to emerge stronger from this pandemic than they entered it.
The Biden Administration has put an important emphasis on equal pay efforts, laying out concrete policy solutions to advance pay equity. On March 15, 2022, President Biden signed a new Executive Order (EO) on Advancing Economy, Efficiency, and Effectiveness in Federal Contracting by Promoting Pay Equity and Transparency. The EO requires the Federal Acquisition Regulatory (FAR) Council, in consultation with the Secretary of Labor, to consider ways to limit or prohibit federal contractors and subcontractors from using salary history in setting pay or making employment decisions. This EO is an important step toward ensuring that federal contractors cannot rely on salary history to set pay, which often perpetuates past gender and race-based pay discrimination.
The Office of Federal Contract Compliance Programs (OFCCP) issued a new directive clarifying that federal contractors are required under existing OFCCP regulations to perform annual pay equity audits to determine whether there are any gender, race, or ethnicity-based disparities in compensation. The directive also clarifies that OFCCP has the legal authority to review contractors’ pay equity audits to ensure compliance with OFCCP regulations.
The Office of Personnel Management (OPM) announced that it will issue a proposed regulation to address the use of salary history in hiring and pay-setting decisions for federal employees. This action is consistent with Executive Order 14035 on Diversity, Equity, Inclusion, and Accessibility in the Federal Workforce, from June 2021, which requires OPM to consider whether to “prohibit agencies from seeking or relying on an applicant’s salary history during the hiring process to set pay or when setting pay for a current employee, unless salary history is raised without prompting by the applicant or employee.”
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