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  • Nicole Vorrasi Bates

$956 Billion Reasons We Must Address the Gender Pay Gap Immediately

Updated: May 3, 2021


April 20, 2021. Barely a day goes by without seeing media coverage of the gender pay gap, which is highly likely to worsen as a result of the devasting effects the pandemic has had on women. As noted in our recent blog – “What’s in a Name?” - it appears as if major corporations, such as the Coca-Cola Company, have taken notice and are willing to take action to remedy the inequities.


However, is that really the case? Opposition to the proposed Paycheck Fairness Act indicates otherwise.


Current federal law, the Equal Pay Act of 1963, as amended (the “EPA”), provides that an employer may not discriminate by paying employees of one sex less than employees of the opposite sex for a job:


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.


These four exemptions, particularly “any other factor other than sex”, are so broad that it is not difficult for an employer to come up with an excuse to mask the discrimination.


Last week, on April 15, 2021, acknowledging that the EPA is not working as intended to combat gender pay inequality, the US House of Representatives passed the Paycheck Fairness Act, noting:


In many instances, the pay disparities can only be due to continued intentional discrimination or the lingering effects of past discrimination. After controlling for educational attainment, occupation, industry, union status, race, ethnicity, and labor force experience roughly 40 percent of the pay gap remains unexplained.


Hard to argue with the fact that the EPA is not enough.


The Paycheck Fairness Act is intended to address the failures of the EPA by:

  • Expanding the definition of “sex” to include pregnancy, childbirth, gender identity, sexual orientation and sex characteristics;

  • Narrowing the “any factor other than sex” defense to bona fide business factors, such as education, training or experience and requiring employers relying on the defense to establish the factor “(i) is not based upon or derived from a sex-based differential in compensation; (ii) is job-related with respect to the position in question; (iii) is consistent with business necessity; and (iv) accounts for the entire differential in compensation at issue;”

  • Prohibiting employers from asking for or relying upon prior compensation history of perspective employees;

  • Prohibiting an employer from requiring an employee to sign a contract or waiver that prohibits an employee from discussing the employee’s wages;

  • Providing for additional compensatory and punitive damages and granting easier access to participate in class action lawsuits; and

  • Requiring employers to submit compensation data based on sex, race, nationality and position to the Equal Employment Opportunity Commission.

The Paycheck Fairness Act was originally introduced in 1997, and it has been reintroduced in every session of Congress over the last twenty-four years. This is the 4th time the Bill has passed in the House, but it has never garnered enough Republican support in the Senate to reach a vote, generally due to the filibuster.


Although the Bill that passed last week had three Republican co-sponsors, only one Republican ACTUALLY voted for the Bill. I wonder why those other two Republican co-sponsors voted against their own Bill? More on that below.


Last Congress, Republicans introduced the Wage Equity Act of 2019. Noting that 49% of working women are their families' primary winner, this Bill stated that, “despite the [advances made by women,] there is still concern among the American public that gender-based pay discrimination has not been eliminated.”


“There is still concern among the American public?” Seriously? You think??


The existence of the gender pay gap and widespread gender discrimination is beyond refute. That alone gives us an indication of the usefulness of the Wage Equity Act.


Under the Wage Equity Act, which apparently was reintroduced on April 13, 2021, an employer is not required to audit or report its pay practices, and there are restrictions placed on an employee’s ability to discuss compensation. In addition, it fails to narrow the broad exemptions in the EPA and, in fact, adds another exemption to the prohibitions on pay discrimination if the employee has a flexible schedule, teleworks, or works the same number of hours but does so in fewer days.


Yes, that is what the Wage Equity Act actually states.


If a woman works 40 hours in four days, and a man works 40 hours in five days, the employer can pay the woman less. If the woman works from home two days a week, but works sixty hours, and a man works forty hours in the office, the woman can be paid less.


All of this under the guise that the Wage Equity Act is empowering women by providing for flexible work arrangements; that women get paid less because of choices they make. How does this even hold water at a base level given the acknowledgement that nearly half of working women are the primary breadwinners of their families?


The Wage Equity Act (and consequently the resistance to the Paycheck Fairness Act) is smoke and mirrors at best – an attempt to placate those that are “still concern[ed]” that gender pay discrimination exists. And at worst . . .


According to some supporters of the Wage Equity Act, the employer reporting obligations contained in the Paycheck Fairness Act will collectively cost employers approximately $600 million annually if it is enacted. And? So what.


Any idea what it costs women?


According to a March 2021 report from the National Partnership for Women and Families, US women employed full-time lose more than $956 billion in the aggregate every year due to the gender pay gap! It would take nearly 1600 years of employer reporting costs to catch-up to one-year of losses for US women! And the employer reporting would not be necessary but for employers’ rampant discrimination under current law.


The other arguments against the Paycheck Fairness Act also ring hollow. According to Republican Representative Don Bacon (NE-02), a co-sponsor of the Wage Equity Act:


Equal work deserves equal pay. Addressing pay discrimination in the workplace must be a priority. H.R. 7, the so-called “Paycheck Fairness Act” introduced by my Democrat colleagues, offers no new protections, threatens workers’ privacy, and drags hardworking women through never-ending legal proceedings and lawsuits.”


Pay transparency is essential to pay equality as it will expose the discrimination. Yes, that will result in additional litigation – and it should. Women need recourse. If there are no consequences for the gender discrimination, this will never end. To twist that concept and use it against the “hard-working women” who, along with the families they support, are getting taken for more than $956 billion per year, is unconscionable. Representative Bacon should be ashamed.


Fortunately for women, the Paycheck Fairness Act, and not the Wage Equity Act, passed in the House. Sadly, as the result of the filibuster in its current form, the Paycheck Fairness Act is unlikely to pass in the Senate.


Why is the issue of gender equality partisan? Threat to current power structure? Money? Systemic racism and gender bias? Yes. All of the above!!!!


Regardless, given the partisanship, we need corporate America on board to effectuate the changes needed to attain gender equality and eliminate the pay gap. So where do they stand on the Paycheck Fairness Act and the gender pay gap?


Recently, there has been widespread condemnation by major corporations and organizations of the proposed and/or enacted voter suppression laws that serve to disenfranchise minorities and poorer Americans, particularly Black voters. Such corporations, including American Express, Cisco, Citi, Coca-Cola, Dell, Facebook, Google, IBM, Johnson & Johnson, Mastercard, Merck, Target and Uber, moved events, issued independent or joint statements and/or participated in an organized advertisement condemning voter suppression laws in the New York Times and Washington Post.


In its statement against voter suppression, the Civic Alliance, which represents over 100 corporations, including Target, Facebook and Uber, stated “We stand in solidarity with voters 一 and with the Black executives and leaders at the helm of this movement 一 in our nonpartisan commitment to equality and democracy.”


These corporate actions and statements supporting equality are promising. Add to it the Coca Cola Company’s commitment to use its buying power to hold its service providers accountable for pay and racial and gender discrimination, as detailed in our recent blog, “What’s in a Name?”, and it would appear that these corporations would embrace the Paycheck Fairness Act.


However, on April 13, 2021, the same day the Republicans supposedly reintroduced the Wage Equity Act, the US Chamber of Commerce, the nation’s largest business organization, which represents the business interests of small businesses, trade associations, major corporations and everything in between, wrote to all of the members of the House of Representatives strongly opposing the Paycheck Fairness Act. Maybe this why the Republican co-sponsors flipped.


The US Chamber of Commerce argued existing protections under the EPA and Title VII of the Civil Rights Act of 1964 are sufficient. Clearly, we know that is not the case given the current gender pay gap and minimal progress over the past few decades, as well as the additional hurdles women face establishing discrimination under Title VII. See our Blog “The ERA – Can We Stop History From Repeating Itself?” for more details on why these provisions do not help.


Not surprisingly, the US Chamber of Commerce also declared its support for the Wage Equity Act and essentially reiterated the baseless arguments made by Republican Representatives as described above. The Wage Equity Act is nothing more than lip service - a blatant attempt to pretend to care about gender equity and pay equality.


Consistent with that perspective, the US Chamber of Commerce’s website has a bunch of words about diversity and inclusion but does not say much of anything. And apparently, it does not apply to women!


What? How are we back here? This was my experience in the beginning of the century! And we know that Black and Latina women are faring far worse than women on average.


Bet you would not be able to guess that the US Chamber of Commerce is run by a woman. Fact. Hope she does not work from home or on a compressed schedule.


The US Chamber of Commerce’s rhetoric is an example of the diversity efforts to which Bradley Gayton, Senior Vice President and General Counsel of the Coca Cola Company, was referring when he wrote:


We will no longer celebrate good intentions or highly unproductive efforts that haven’t and aren’t likely to produce better diverse staffing. Quite simply, we are no longer interested in discussing motivations, programs or excuses, for little or no progress – it’s the results that we are demanding and will measure going forward.


The US Chamber of Commerce does not publish its full membership list on its website. However, each of the corporations named above, including the Coca Cola Company, are listed as committee members.


Corporate America, what gives? US Chamber of Commerce members, how can you purport to have a “nonpartisan commitment to equality and democracy,” yet not only fail to support the Paycheck Fairness Act, but actually argue for the status quo/Wage Equity Act, knowing full well that women are in crisis, and the gender pay gap is expected to last for generations to come? At a cost of over $956 billion to women in the US each year?


We need the corporations listed above and like-minded corporations to advocate immediately for gender equity and equality within the US Chamber of Commerce, and to use their power to stop corporate America from advocating and using its political influence (aka purse strings) against policies and laws, such as the Paycheck Fairness Act, the Equal Rights Amendment, and the American Jobs Plan, that are essential to the fight for gender equality.


The time has come for all of corporate America to step up and support equality for all people regardless of gender, gender identity, race, sexual orientation, motherhood, and everything else. That is what the majority of America is demanding. Equal rights are fundamental rights, just like the voting rights many in corporate America recently and rightfully stood up to protect.


For our part, we need to keep our foot on the gas and continue to keep the fight in the forefront. Shattering Glass will do that by spreading the word. Please join us in the Shattering Glass Movement as our collective voice is strong!


WANT TO DIG DEEPER?


Paycheck Fairness Act

Support for Paycheck Fairness Act

Republican Co-Sponsors Vote Nay

Wage Equity Act of 2019

Arguments for Wage Equity Act

Corporations Against Voter Suppression

Business Letters Against Paycheck Fairness Act


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