One of the Obama Administration’s more subtle and creative efforts to spotlight the gender wage gap essentially relied on peer pressure – the White House Equal Pay Pledge. By signing the Pledge, implemented in June 2016, companies publicly committed to prioritizing pay equity by:
- Acknowledging the critical role businesses must play in reducing the national pay gap;
- Conducting an annual company-wide gender pay analysis across occupations;
- Reviewing personnel processes to reduce unconscious bias and structural barriers;
- Embedding equal pay efforts into broader enterprise-wide equity initiatives; and
- Pledging to identify and promote other best practices to close the wage gap.
Within six months, more than 100 of America’s largest private sector employers had taken “the Pledge.” Even after the election of Donald Trump, employers continued to sign the Pledge. Forty-four additional companies declared their commitment to equal pay between August and December 2016. The Equal Pay Pledge appears to have since been removed from the White House website.
While pay equity was a top enforcement priority throughout the Obama Administration, it remains to be seen how the new administration will address the issue. During the presidential campaign, Trump said in an interview on MSNBC’s “Morning Joe,” in August 2015, “Women should have absolute access to capital . . . . If they do the same job, they should get the same pay . . . but it’s very hard to say what is the same job . . . . It’s a very, very tricky question.” Subsequently, Trump’s daughter Ivanka Trump offered this message at the Republican National Convention in July 2016, “Politicians talk about wage equality, but my father has made it a practice at his company throughout his entire career. He will fight for equal pay for equal work, and I will fight for this too, right alongside of him.” The Trump Administration has not yet made policy recommendations on pay equity.
Takeaways: The Equal Pay Issue is Not Likely to Fade Away Quietly
While it remains to be seen how the Trump Administration will address pay equity, activist investor groups and public figures continue to call on employers to prioritize equal pay. Given the media attention, companies that publicly committed to advance pay equity in their organizations may find it difficult to abandon or withdraw from those commitments. Furthermore, with an anticipated business-friendly administration in the White House, state and local governments are strengthening their pay equity laws in ways that increase the risk of workplace lawsuits. Accordingly, employers should consider:
- Conducting privileged, proactive pay analyses to determine if employees are paid fairly.
- Reviewing compensation policies and placement processes to reduce unconscious bias and structural barriers and ensure compliance with federal, state and local fair pay laws.
- Ensuring hiring managers, recruiters and others involved in the hiring/compensation process understand and adhere to federal, state, and local fair pay laws.