Pay Transparency and Equal Pay Day
Equal Pay Day originated in 1996 as a public awareness event to illustrate the gap between men's and women's wages. The date marking this year’s Equal Pay Day, April 2nd, symbolizes how far into the year women must work to earn what their male counterparts earned in the previous year. This means that almost one quarter into 2019, women finally earn what they would have earned three months prior had there not been obstacles that prevent women from earning incomes equal to men.
GELC recognizes the gender pay gap as a pressing issue and has focused much of its work dismantling some of its core causes - such as workplace gender discrimination, family leave policies and sexual harassment. Recently, GELC joined efforts with PowHer New York to address an additional contributor to the gender pay gap: the lack of transparency surrounding employees' wages. Common employer practices, such as using prior salary history in setting current pay and prohibiting employees from discussing their wages, allow pay inequality to persist. Passing legislation to prohibit these practices will empower women to engage in collective bargaining over their wages and remove significant obstacles to learning about existing gender-based pay disparities.
A recent study by Columbia Business School examined the effects of a Danish law requiring companies to publicly report their employee’s salary information by gender. The study assessed the degree of wage disparity by gender before and after the passage of the Act to determine whether it achieved its purpose of promoting wage equality. Sure enough, the study showed that the gender pay gap decreased by 7% following the enactment of the new policy, evidencing the effectiveness of policies requiring pay transparency. Unsurprisingly, countries with similar policies (such as the UK) show lower pay disparities based on gender.
GELC supports the passage of pay transparency legislation in New York State that combines the most effective elements of existing regulations. 16 U.S. states already have statutes that recognize the importance of Pay Transparency and seek to promote it by providing protections to employees who inquire about their colleagues’ wages. Similar to the pay transparency laws in Denmark and the UK, the most encompassing U.S. state laws prohibit employers from outright preventing their employees from inquiring about their colleagues’ wages or disclosing their wages to others, as well as from retaliating against employees who engage in these dialogues. The most effective Pay Transparency laws also include all workers in their coverage (rather than excluding groups like domestic workers and government employees), and provide broad and accessible remedies for employees who have been denied access to wage information.
Transparency helps ensure that women are informed of the wages earned by their male colleagues who perform comparable work, which is essential to closing the gender pay gap. In working to pass a pay transparency statute in New York, GELC strives toward achieving greater economic security for women because the power of pay transparency spans beyond preventing women from being paid less based on gender. Empowering women with the information they need to successfully claim their right to equal pay will alleviate poverty in the millions of families headed by single women.
Because the majority of single-mother and low-income families are headed by women of color, passing a strong, comprehensive pay transparency law will greatly impact the pernicious effects of intersectional inequality. That is, create greater access to education, healthcare, and other social resources - access and privilege that is largely available to white women and white families. With higher wages and stronger benefits, the opportunities that women can provide for themselves and their families is unmatched.
This Equal Pay Day, GELC encourages women to critically assess their earnings and determine the extent of their rights to be informed of what male employees are earning in comparable roles. While formal Pay Transparency protections are being developed, it is important for women to begin normalizing dialogues around creating an atmosphere of transparency within their work environments. The true power of Equal Pay Day comes from publicly acknowledging the existence of the gender pay gap and encouraging all individuals to partake in discussing its effects and developing possible solutions.