Employment HR: Solving the Pay Inequity Riddle

Laurie Allen

Many job seekers are familiar with the question. Along with standard queries about past employment and work positions, applications often ask about salary history, too. For a person of privilege, that salary question might be no big deal. But what if you're a woman who's been the victim of a lifetime of pay inequity? If you tell your employer your past salary, you might put yourself at a disadvantage—and perpetuate unfair wages.

Now, as part of a growing movement toward closing the pay gap between men and women, activists are calling for an end to the salary-history question. And they're starting to gain traction. The city of Columbus no longer asks about salary history in its job applications. Several other cities across the country have done the same, and the private sector also is taking a closer look at how their hiring practices may skew toward lower wages for women, who tend to face more financial challenges than men. Census and other data show that one in four women living in central Ohio is financially insecure, while the poverty rate among female-headed households is six times that of men.

“Just one question can lead to inequities,” says Shelly Beiting, executive director of the Columbus Women's Commission. Columbus Mayor Andrew Ginther and First Lady Shannon Ginther formed the 18-member commission to improve the economic position of women in the community.

The commission chose pay equity as its first target because it drives other issues, such as housing and healthcare, Beiting says. In Columbus, women earn 78 cents for every dollar a man does, below the national average of 80 cents. Removing the question about salary history “is one strategy in the big toolbox of pay equity. It's an easy first step,” Beiting says.

About 150 employers, from private family-owned businesses to large corporations, are participating in The Columbus Commitment: Achieving Pay Equity. They have signed a pledge that does not specifically require employers to drop the salary question in applications but to learn about and address pay inequities.

By signing the pledge, companies agree to:

• Study the economic impact of pay inequity; how implicit bias contributes to the problem; and the disproportionate impact across races and ethnicities

• Review objective information to understand how hiring, promotional and pay practices may lead to disparities

• Invest time and talent to address gender- and race-based disparity, and employ solutions

• Share solutions with other organizations and participate in an annual best practices event hosted by the Columbus Women's Commission

Although more employers are moving away from asking about salary history upfront, “there was a time when it was asked almost universally,” says attorney Mat Parker, who specializes in labor and employment issues at Fisher Phillips. Parker says employers have used the question to screen for candidates who they couldn't afford, or who might not qualify for the position. “Rightly or wrongly, there might be a belief that a lower salary correlates with insufficient skills, knowledge or experience,” he explains.

Local attorney Sarah Perez says asking for salary history “probably unfairly sets expectations and may work against women in terms of pay equity. It doesn't need to be asked, and it's not necessary.”

Commission member Gale King, executive vice president and chief administrative officer for Nationwide, agrees. “I don't see how it's relevant.”

That said, employers both large and small have to keep a close eye on hiring and salary patterns. “Salary differences can occur gradually. If you don't have practices in place, it's easy to look up and see there is a problem,” King says. Nationwide, for example, conducts twice-a-year reviews around gender and race equity issues.

Perez believes “an open and transparent dialogue, having both women and men at the table” is a key to achieving pay equity.

Beiting says there is no one-size-fits-all policy that employers can use; rather, “it takes each employer to look at their own culture to see what is going to work best to effect that change.”

There are variations among states and cities that have nixed the salary history question, Parker says. Some ban the question at any point during the application/hiring process, while others allow it after an offer has been made. In some states, the ban applies to public employees only.

Parker says he spends a good deal of time counseling his clients on trends in pay equity. “To some extent, it is re-shaping the negotiation of wages … and can be a bit of a legal minefield.”

Unlike some cities, Columbus is not asking pledge signers to provide payroll data. Doing so might keep some companies from participating, and in addition, is labor intensive, Beiting says. So far, she has encountered “zero pushback” from companies about the commitment.

Beiting and others say in most cases, pay inequities aren't intentional. “I've had CEOs tell me it just never crossed their radar.”

Perez's father-in-law John, who founded Perez & Morris, grew up in a migrant farming family. “Equal pay for equal work is woven into the fabric” of the law firm's core values, she says.

As Columbus continues to evolve into a top-tier city with a thriving economy, it makes sense to pay close attention to such issues, King believes. “If we want to attract and retain the best talent, it stands to reason that we want to have pay equity.”

The commission is scheduling educational and roundtable sessions so business leaders can learn both from experts in the field and from each other. “I get phone calls every week from folks who have signed the pledge and ask, “ ‘What do I do next?' ” Beiting says.

“There's a lot of momentum around the pledge in Columbus,” Perez says. “People want to do the right thing.”

Laurie Allen is a freelance writer.

• Gender pay gap, or wage gap, refers to women's median income compared to men's. In Columbus, women are paid 78 cents for every $1 a man makes. Nationally, women make 80 cents on the dollar. African-American women make 63 cents, while Latina women make 54 cents.

• Equal pay for equal work means ensuring women and men are paid the same or equitably for doing the same job—for instance, a female librarian should make the same amount of money as a male librarian.

• Pay equity means paying equitably people who do different jobs but of similar skill, value, responsibility and working conditions. The goal is to ensure female-dominated jobs, such as school cafeteria workers, are paid equitably compared to male-dominated jobs, such as school custodians. Too often, Beiting says, “The pay differentials can be vast.”