Op-Ed column as published in The Providence Journal:
As women-owned businesses reach record levels, so too does the focus on gender pay equity as an intentional practice for fielding the best talent. Women-owned businesses are an economic force. They’re growing at five times the national average.
Interestingly, it’s against this backdrop that the subject of gender pay equity has come sharply into focus as a prime workplace issue. Not just here in the United States, but internationally as well, employers in every industry are crunching payroll data to see where “equal pay for equal work” isn’t being achieved.
On the government front, several states including, Oregon and Massachusetts, have passed some form of pay equity legislation. Here in Rhode Island, this conversation is top of mind in public policy circles, as well. The General Assembly is debating legislative responses to what’s most assuredly a complicated dynamic. As leaders in business, we would like to offer some context and a reasonable alternative that better addresses the root problem.
Ensuring pay equity is crucial for organizations to function successfully. However, the language in House Bill H-7427 and Senate Bill S-2475 is of concern to the Greater Providence Chamber of Commerce. As drafted, the legitimate issue of gender pay equity gets twisted on its head to make it a vehicle for frivolous lawsuits. One version of the bill devises a vague new term “equal pay for comparable work” and calls on government to “promulgate rules and regulations” to come up with a definition. And that would occur after the legislative process, making the details of this compliance-heavy bill a mystery.
Rhode Island’s legislation also lacks useful provisions that have been included in other states’ laws. One such provision is a “safe harbor” that would provide employers who’ve have conducted a good faith wage audit and corrected any inappropriate wage differentials with a valid legal defense. Massachusetts has this mechanism in place.
Another problem with the legislation is that it ignores the fact that some wage disparities are legitimate: employees who work overnight shifts; employees for whom considerable travel is a requirement; and employees with specialized education and credentials directly related to the employer’s business.
As a final critique, we’re concerned that the legislation offers no protection for our small businesses that don’t have compliance officers on staff to interpret and differentiate.
On a positive note, we’d point out that there are lots of excellent ways for employers to actually achieve gender pay equity on their own — without government overreach.
Read the full column here