Was the Lilly Ledbetter Act Enough?

Laleh Hassibi, PayScale

“Our journey is not complete until our wives, our mothers, and
daughters can earn a living equal to their efforts.”
-President Obama's Inauguration Speech, 2013

Today marks the fourth anniversary of President Obama's signing of the Lilly Ledbetter Act. Though it may not have been enough to close the gender gap, other important advances, like data-driven software, have helped the cause tremendously. Let's first take a look back at highlights of the Lilly Ledbetter Fair Pay Act:

  • It extends the time period in which employees can pursue disparate pay claims under four anti-discrimination laws: Title VII; the Age Discrimination in Employment Act (ADEA); the American’s with Disabilities Act (ADA); and the Rehabilitation Act (Rehab Act); and,
  • It amends the Equal Pay Act (EPA) by providing for uncapped compensatory and punitive damages for violators; preventing employers from retaliating against employees who share salary information with co-workers; and requiring employers who make legitimate employment decisions based on factors other than sex to prove these factors are “job related” and consistent with business necessity.
  • In addition, any discriminatory pay decision restarts the 180/300-day period to file an EEOC charge. That is, the statute of limitations on pay discrimination claims restarts if:
    • A discriminatory compensation decision or other practice is adopted;
    • An individual becomes subject to the decision or practice; or
    • An individual is affected by an application of a discriminatory compensation decision or practice—including each time wages, benefits or other compensation is paid.

Was it Enough?

Overall the wage gap still exists, with women making about 80 cents to the dollar that men make. In fact, the wage gap is still such a concern that congress kicked off its new session last week by revisiting the topic. Senator Barbara A. Mikulski (D-Md.) and Congresswoman Rosa DeLauro (D-Conn.) reintroduced the Paycheck Fairness Act, which is aimed at ending wage discrimination between men and women working in the same position basically by allowing more transparency in wages. 

But is the Gap Really That Big?

PayScale research shows a slightly different situation in 2012 than the overall view of the gender gap. What we found was that, when comparing apples to apples, the gap is much smaller than the overall statistic. In fact, in many skilled positions, women's wages are lagging by only about 5 percent.

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Data-Driven Technology is Helping

In this modern world, anybody can log into online salary data sources, like PayScale.com, and rate their pay against others like them. Concurrently, employers have access to the same data sources to help them set compensation fairly. These technological advances are enabling more transparency in fair pay and are empowering employees with knowledge to negotiate a fair salary. At the same time employers have the tools at their fingertips to establish fair pay practices in addition to being more easily able to defend salary decisions based on market data. 

Whether your organization's pay system is fair is not quite as important as if it is perceived as fair. If your employees perceive unfair pay, your company will suffer in terms of lost productivity, challenges with talent retention and EEOC audits. Federal mandates need not be the main factor in closing this gap. Company practices around fairness, work hour flexibility and transparency can have an even more important impact. Why wait for governance to force you into fair pay and transparency?

More than 2,300 organizations use PayScale's subscription software to:

  • Allocate raises. PayScale Insight allows you to allocate raises based on employee performance and labor budget.
  • Attract talent. Price jobs based on your local market and competition.
  • Retain employees. Get pay right and show them how you did it. Your employees will be more satisfied to stay.
  • Drive performance. Get their salary right so they can focus on doing a good job.
  • Be confident. With know-how to talk about comp with anyone.

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