If you feel like you’re underpaid, you may not be imagining it.
Pay inequality is a real problem, particularly for women.
In 2018, women took in just 85% of what men earned, according to an analysis of median hourly earnings from the Pew Research Center.
Actress Michelle Williams, center, speaks during a news conference for Equal Pay Day in Washington, D.C., U.S., on Tuesday, April 2, 2019. Photographer: Anna Moneymaker/Bloomberg via Getty Images
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The good news is that the gap has gotten smaller since 1980. Still, it will take women 39 more days of work to catch up to what men earned in 2018, according to Pew.
The issue is getting attention from legislators. In March, the House of Representatives passed the Paycheck Fairness Act. That is focused on updating existing laws to make it easier for employees to challenge pay discrimination and making employers more accountable for unfair practices.
In order for those changes to be implemented, it would also have to get through the Senate.
Still, employers are already being challenged on pay equity issues.
On Thursday, a federal judge said that mid- and large-size employers have until Sept. 30 to provide data to the Equal Employment Opportunity Commission on how much they paid workers of different sexes, races and ethnicities in 2018.
That comes as companies have faced litigation on pay equality.
“Every day, there’s another news story about another company or firm being sued for pay equity issues, and that trend will continue,” said Kathleen Caminiti, partner at law firm Fisher & Phillips and co-chair of the firm’s Pay Equity Practice Group.
“Pay equity litigation is likely to be some of the most extensive employment-related litigation in the next 10 years,” Caminiti said.
Pay equity audits
Litigation can be very costly for employers. If a court finds that there’s an unlawful differential of $10,000, the company could be on the hook for three times that amount — $30,000 — in damages, plus attorneys’ fees, according to Caminiti.
To protect themselves, many employers are opting to do pay equity audits.
Those evaluations can identify whether or not there are income disparities in the company’s ranks.
Problems are identified either through statistical analyses or by evaluating particular jobs and overall pay structure.
“The law doesn’t require everybody to be paid the same,” Caminiti said. “It just requires a legitimate, bona fide reason for the differential.”
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Many companies that do these audits are surprised by the results, she said.
That is because disparities may result from an unconscious bias, like an assumption that a woman with young children does not want to travel, for example.
Then, the employee who is traveling more may consequently have more opportunity and higher pay.
“Suddenly, you have a pay disparity,” Caminiti said.
Pay gap fixes
Once a company has identified pay gaps, there are steps it typically takes to address them.
That can include making pay adjustments through bonuses or raises. It may also entail restructuring positions, so that a person who gets bigger checks and has more responsibility gets a new job title.
Of note, it is illegal for companies to reduce an employee’s salary to correct a pay disparity, Caminiti said.
Some companies may be surprised by the results when they dig into their pay patterns. This year, Google found it was underpaying more men than women who held similar positions.
Those results are just one part of the puzzle, and do not necessarily take into account other factors, according to experts.
“Pay is a great thing to look at, but it’s just one piece of the whole compensation package,” said Nicole M. Coomber, associate clinical professor of management and organization at the University of Maryland’s Robert H. Smith School of Business.
If you feel that you are underpaid, there are proactive steps you can take to rectify the situation.
Many states have laws that protect employees who ask about pay practices. “You can make inquiries about the pay scale, and you would not be subject to retaliation,” Caminiti said.
Employees are also generally protected by law if they choose to share their wages or discuss compensation with each other.
Other sources, such as professional networks and career websites, can be good sources for gauging where you fall on the pay scale, Coomber said.
From there, you can start to craft a game plan. The first thing you need to remember, Coomber said, is that companies mostly care about their bottom lines.
“You have to talk about what value you’re bringing to the organization,” Coomber said.
Be prepared to get specific about your accomplishments — how much money you are bringing in, clients you’ve landed and the number of customers you handle.
If that is not enough to convince your employer, go out and find another offer, Coomber suggested. “Sometimes you can play a little hardball with these things,” she said.
Still, you may want to handle those negotiations delicately, Coomber said. While women are often blamed for not asking for more money, research shows that those who do bring up the topic are often perceived negatively.
“We like women who negotiate on behalf of someone else,” Coomber said. “We don’t like it when they negotiate on behalf of themselves.”
One way to get around that: Cultivate relationships with sponsors or mentors within your organization who can speak up for you.