SF Chronicle: Fight gender pay discrimination with data

April 23, 2018

By Lois Kazakoff

Despite decades of effort, women still earn less than men, and the pay gap for women of color is even wider. The wage gap persists for a multitude of reasons, but a ruling by a federal court this month took a huge step toward narrowing it.

In its precedent-setting ruling, the Ninth U.S. Circuit Court of Appeals in San Francisco acknowledged that pay was so closely aligned with salary history that it was a way for companies to discriminate based on gender. The court ruled that using prior pay violated the federal Equal Pay Act of 1963.

I wrote about this case in 2015 when state Sen. Hannah-Beth Jackson, a Santa Barbara Democrat, was citing it to update California’s 1949 equal pay law by requiring equal pay for similar work. Aileen Rizo, a Fresno math consultant, had discovered she was earning $12,000 a year less than a male colleague with less education, experience and seniority. His pay had been based on his previous salary. Rizo sued her employer. In ruling on her case this month, an 11-judge panel of the Ninth Circuit established that employers can’t set different pay levels by relying on pay at a previous job.

Now Jackson is building on the 2015 law with SB1284, which would require companies doing business in California with 100 or more employees to file with the state pay data by race and gender. Her bill is modeled on a plan the Obama administration had put in place in 2016 to take effect this year. The Trump administration shut down the project in 2017.

Jackson’s bill seeks to encourage companies to self-audit their pay structures in hopes of discovering unintended pay discrimination. In turn, the data could help the state to measure progress (or lack of) toward pay equity.

The California Chamber of Commerce opposes the bill as a “job killer” and complains that it would “create a false impression of wage discrimination or unequal pay when none exists.”

But how do we know none exists without data? Jackson’s bill would help reveal wage discrimination that results from unconscious cultural biases.

In a telephone conversation, Jackson cited the example of Salesforce CEO Marc Benioff. His female managers encouraged him to launch a pay equity self-audit — something he initially dismissed as unnecessary. They persisted, he eventually agreed, and the audit uncovered that Salesforce was indeed underpaying its female employees. It cost the company $3 million to bring all 17,000 employees to parity.

Work culture has changed over the years, but economic change has not kept apace. When my generation entered the workforce, the focus was on finding a job that used our education and skills, avoided the dead-end secretarial pool, and allowed balance with family responsibilities. Pay concerns arose later.

Now there are many more women in the workforce. “Women work today because we have to work,” Jackson said. When women are not paid equally, it harms them, it harms their retirement, and it harms the community as a whole, she said.

President Ronald Reagan famously said while signing a nuclear treaty with the Soviet Union that we must “trust but verify.” Surely that proverb applies to gender and pay data from well-intentioned employers.