Are you an Equal Opportunity Employer? Most employers would say “Yes”. You probably have policies that say so.
But guess what?
If you pay your female employees less than you pay male employees to do the same jobs, if your company-wide promotion practices favor male over female employees, you might be falling short of that mark–and you will likely have to pay big time.
What is big-time? For Goldman Sachs, it was $215m to settle a long-standing class action lawsuit over those very allegations. The settlement even eclipses the $150m Smith Barney paid as a similar settlement in the 1990s. It will cover approximately 2800 female associates and vice presidents. The lawsuit began in 2013 and was certified as a class action in 2018.
The plaintiffs alleged that the bank’s review process allowed managers, mostly men, to nominate people who contributed to appraisals of staff, leading to a “tap on the shoulder system”
Goldman also agreed to hire an independent expert “to conduct an additional analysis on performance evaluation processes” at the bank, as well as conduct “pay equity studies”.
In its defense, last year in its biennial selection process for partner status, 29% of those selected were women, a record high.
That said, it allowed a lawsuit to go on for 10 years before agreeing to do pay equity studies and engage experts to address a systemic issue of discrimination against women. (Last year, Jamie Fiore Higgins published a memoir of her 17 years with Goldman, in which she alleges she suffered bullying, discrimination, and manipulation.)
In general, Wall Street has struggled to address DEI issues. Goldman said it was “proud of its long record of promoting and advancing women and remains committed to ensuring a diverse and inclusive workplace for all our people”.
When your company pays its female employees less than it pays its male employees for the same or substantially equivalent work, and if your company has 15 or more employees it can be liable for discrimination under the Equal Pay Act of 1963 and Title VII of the Civil Rights Act of 1964. Many states also have additional anti-discrimination laws, and, as an employer, you are responsible for complying with the employment laws of every state in which you have employees working, in addition to the Equal Pay Act and Title VII of the Civil Rights Act (assuming you have 15 or more employees). State laws usually have a lower minimum employee threshold, so while your company may be too small to be subject to federal laws, it can still be subject to applicable state laws.
A discriminatory workplace is a toxic workplace and it pollutes the entire company and ultimately everything in its orbit, if the company allows it to happen at all, let alone continue for decades.
That does not have to be your company’s fate, though. If you’re a new company you can, with the help of friendly local employment counsel and competent HR practitioners and those with related expertise implement sound employment practices from the start.
If you are more established and wish to ensure a healthy workplace and attract and retain good talent, you can still be proactive about addressing the root issues. You can review your pay practices at least annually and correct any pay disparities that you cannot justify. You can also review your hiring and promotion practices at least annually to ensure that you are in fact providing equal employment opportunity to women, minorities, individuals with disabilities, and all other members of classes protected under federal and state anti-discrimination, equal employment opportunity laws.
You can — and should–reach out to your friendly local employment counsel for guidance as to best to employ and direct your efforts in that regard, before you are sued, and ideally before the problem arises. (It’s ultimately much easier to prevent making a mess than to clean up a mess.)
Or you can follow in Wall Street’s footsteps — and pay accordingly.
The choice is yours.
Are you an employer interested in proactively addressing workplace challenges and company culture? Visit my website, http://www.janetteleveylaw.com to contact me for a complimentary 20-minute consultation.
Watch my television interview on Good Morning HR with Mike Coffey on Mental Health and the ADA.
Contents of this post are for educational/informational purposes only, are not legal advice, and do not create an attorney-client relationship. Consult with competent employment counsel in the state(s) in which you employ people with your specific questions.
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