The Surprising Legal Loopholes Preventing Equal Pay for Women
Money is power, and women aren’t getting their share of it. In America, men earn 20 percent more than women, and that disparity is even greater for women of color. Now is the time to close that gap—and these are the women doing it.
Fatima Goss Graves is president and CEO of the National Women’s Law Center, where she has held numerous roles fighting to advance opportunities for women and girls. She is currently administering the Time’s Up Legal Defense Fund to combat sexual harassment in the workplace. Here, she discusses the legalities of the gender pay gap.
There are two laws in place that address pay discrimination: The Equal Pay Act, which turns 55 years old this year, and Title VII of the Civil Rights Act, which bans employment discrimination. But pay discrimination still persists in nearly every sector. There are a range of ways to improve those laws and make it harder for employers to discriminate—and, for those who do discriminate in pay, to ensure that there’s more accountability so that employers have the incentive to pay people the right way the first time around.
Over time, loopholes have developed in the law that have made it easier for employers who are paying people unfairly to not be found responsible. One big reason these cases lose in court is because employers argue that a factor other than sex was driving the unfair pay. Employers have been able to win even when the reasons they give for unfair pay don’t really pass the smell test. They are reasons that sound a lot like sex but don’t say sex.
There’s also the establishment part of the Equal Pay Act, which asks who your comparator is. When you’re talking about a range of changes, companies are able to slice and dice so much that it seems like no one is available for you to compare yourself to, so therefore you’re never paid less because you’re a unique individual, even when you’re doing something very similar to someone else. Making it possible for there to be actual and meaningful comparisons is important. What you don’t want is a situation where everyone is considered so unique that you’re not able to have an apples-to-apples comparison.
How to Detect Unfair Pay
Pay discrepancies are hard to detect. It’s very rare that anyone actually knows what their counterpart makes. People usually find out that they were being paid less by accident: someone casually makes a remark and you find out you’re making 10 percent less than the person doing the same thing as you. We need to add more transparency around wages and get rid of rules that some employers have that make it impossible for people to talk about their wages to give people the information they need to make a meaningful comparison.
A lot of states have chosen to limit employers’ abilities to engage in the practices that have allowed pay disparities to creep in. Massachusetts, New York, and California are getting rid of salary matching, which is the idea that whatever you made in your last job is where you’re starting in your next job. Because women tend to make less, that means they’re starting from a lower footing and carrying prior lower pay into job after job. These fixes are now embodied in the Paycheck Fairness Act, which was introduced in the House and Senate—but hasn't yet passed.
Another thing that aids in transparency is collecting pay information from employers. Last month, the U.S. Equal Employment Opportunity Commission (EEOC) was supposed to start implementing pay collection that would have gone to all employers around the country, but the Trump administration stopped it from going into effect. A number of states are now collecting that information from employers, though, which does a couple of things: 1. It make employers more likely to look at pay data, which can prevent pay discrepancies from going on and on without anyone noticing it. 2. It will make the civil rights enforcement that happens at the federal and state levels smarter because they will be informed by pay gap data from employers.
In addition to pay discrepancies, there are pay disparities. That’s when two people are doing the same job, but one is less likely to be in the highest-paid fields and is overrepresented in the lowest-paid jobs. We can fight that by raising the minimum wage, ensuring that there are meaningful promotion opportunities, and taking steps to remove the biases that sometimes creep in when people are making promotion decisions.
There is also the Motherhood Penalty or the Caregiver Penalty, which is fact that women are more likely to share an bigger load of the caregiving, and that shows up in their paychecks. There have been studies that show that fathers actually get a pay bump, while mothers make less after having children.
We need to have more states pass the legislation that makes our pay discrimination laws meaningful. At the same time, we need to do things that will also help close the overall pay gap, like raise wages and address what make it challenging for women to be engaged in both caregiving and work. Outside of the legislative and enforcement contexts, this is an important moment for organizational leaders. People should be doing their own audits and making corrections to avoid pay disparities in their own workplaces. This is a moment where we could use a lot of private-sector leaders as well. Many people have signed the White House Equal Pay Pledge, in which businesses pledge committment to equal pay, from several years ago—they should continue to seek to implement that pledge.
Real Cases You Wouldn't Believe
One case that still stays with me: An employer set up a different insurance plan that men were eligible for versus what the female employees were eligible for. The female employers could only get single self coverage, and the male employees who had families could get family coverage. The were totally relying on stereotypes about who the "breadwinners" were. That case was such a good reminder about the concerns that were in place when people first passed the Equal Pay Act. The truth is women are breadwinners too—not just sometimes but most of the time. By not paying women fair wages, that’s not only undermining women’s economic security; it’s undermining their whole families' economic security.
Any case is going to take a real toll on the individual that’s fighting for their right to be paid fairly. That’s why it’s so important for the incentives to be in place for employers to do what they’re supposed to do the first time: pay their employees right, do the audits to make sure that there aren’t inadvertent mistakes that creep up, and, if there are, fix them. The cost on the individual worker who’s being shortchanged by an employer is so much more than the cost that the employer would absorb to rectify it.
VIDEO: The Major Mistake Women Make In Salary Negotiations
We need to fight pay discrimination all fronts. We need to improve our laws, we need to raise wages, we need to ensure that women have more opportunities in higher-paid jobs. We need to make sure that women who are working and caregiving aren’t discriminated against when they’re pregnant and make sure they have access to paid leave, paid sick days, and childcare that’s high-quality and affordable. Now is the time for activism.
—As told to Claire Stern