Gender pay equity has become an increasing concern for companies large and small, because of an onslaught of tougher government legislation and regulations, particularly at the state level, and lawsuit risks for unexplained pay gaps.

Now an increasing number of companies are undertaking voluntary pay audits to identify any such gaps, according to several participants at a Sept. 26 pay equity event organized by the Association of Corporate Counsel Georgia chapter's Women's Initiative. The event, held at Georgia State University's College of Law building, attracted about 75 in-house counsel from a range of local companies. Almost all of the attendees were women.

"I'm seeing more focus on this issue by clients," said panelist Alec Grecu, a labor economist at Mercer Consulting, the world's largest HR consultancy. He said clients are devoting more of their budgets to identifying gender pay gaps via pay equity audits.

The audits are designed to spot unexplained pay gaps among employees performing similar jobs and at similar experience levels; quantify the median amount of the gaps; and determine what factors are causing them.

The aim is to "identify pockets of risk" for unexplained pay gaps, Grecu said.

"We are seeing more clients interested in pay equity audits and compensation programs in general," said Jennifer Sandberg, a Fisher & Phillips partner who moderated one of the small-group discussions following the panel.

Two factors are driving the increase in clients' requests for assistance, said Sandberg, a member of FisherPhillips' pay equity practice.

First, an increasing number of states are passing pay equity laws that are more stringent than existing federal law. Also, the Equal Employment Opportunity Commission set a Sept. 30 deadline for companies with 100 or more employees to disclose much more detailed compensation data for employees by gender and race or ethnicity.

What's more, a "culture shift" is driving an increase in class-action wage-discrimination suits, Sandberg said. "While suffering through those lawsuits, employers realize that they have pay equity issues."

Companies need to make sure they can "explain any pay gaps in a valid way," said Mary Ulmer-Jones, an associate general counsel for Bank of America handling employment law issues for several divisions.

It's better for a company to catch "unexplained risk pockets" through their own audit, she said, rather than to discover gender pay gaps because of lawsuits or government inquiries (which can be triggered if a company is a federal contractor).

|

Audit Benefits

Beyond risk avoidance, Ulmer-Jones added, closing gender pay gaps produces a "cultural payoff," by better positioning a company to attract and retain talent.

"Think about the cost you incur in bringing someone in, training them and having them become a subject-matter expert. You don't want that person leaving and going to your competition," said Ulmer-Jones of Bank of America. "We are an employer of choice for women because of the work we've done."

Gender pay audits can lead to larger conversations among management on how the company tracks and rewards performance, Ulmer-Jones said, emphasizing that approaching gender pay equity is a continually evolving process.

Beyond pay gaps for the same job level, women tend to be employed in lower-paying types of jobs, said another panelist, Deborah Dinner, an Emory University law school professor who studies gender and class equity in the marketplace. "We need to look at how women and men are channeled into different types of jobs."

Women often track into lower-paying jobs at law firms and companies because of the "lack of a family-friendly environment," Dinner said, adding that women take more leave to have children or take care of ailing family members.

Eversheds Sutherland special counsel Anna Halsey, one of the committee members for the ACC Georgia Womens' Initiative event, said the group hopes to keep the conversation going with additional events on pay equity and related topics.

|

Read More:

Pay Equity Practices Take Off as New Gender Pay Gap Laws Spread