Today is Equal Pay Day

Today is Equal Pay Day. Equal Pay Day was originated by the National Committee on Pay Equity (NCPE) in 1996 as a public awareness event to illustrate the gap between men's and women's wages. According to the NCPE, Equal Pay Day "symbolizes how far into 2010 women must work to earn what men earned in 2009."

According to NCPE,

"Equal Pay Day involves thousands of local advocates in programs and activities focused on eradicating wage discrimination against women and people of color. Local Equal Pay Day activists organize rallies, lobby days, speak-outs, letter-writing campaigns, workshops, and meetings with employers, policy-makers, and enforcement agencies to promote effective solutions for closing the wage gap."

In his March 2010 testimony before the Senate HELP Committe, Acting EEOC Chairman Stuart Ishimaru stated:

"The wage gap is alive and well in America, with the typical full time year round female worker making $0.77 for every dollar earned by her male counterpart... Although some of the pay gap can be explained by differentials in experience or as a result of the differences in the occupations men and women typically do, the Shriver Report estimates that about 41% of the pay gap cannot be explained by these factors."

Based on the findings of the Shriver Report, of the $0.23 differential between men's and women's earnings, approximately $0.09 cannot be explained by differentials in experience or differences in occupation.

Employers should regularly conduct compensation self-audits to ensure that they are compensating employees fairly. In these self-audits, looking for gender disparities is not enough; it's important that all employees are compensated fairly, regardless of protected group status.

Recap of Wednesday's Webinar 'Using Social Media for Recruiting? Beware Disparate Impact"

Today's installment on The Proactive Employer podcast is a 15-minute recap of the webinar from 2/9/10. To go along with that podcast, I thought I'd make the handout from my webinar available to everyone. Enjoy!

Using Social Media For Recruiting Handout ( S Thomas)

View more documents from Equal Employment Advisory and Litigation Support Division of Minimax Consulting.

Comment on 'Go Time' For Discrimination Claims

Mark Batten, Steven Hurd, and Brian Gershengorn have an article appearing in today's "Corporate Counsel" entitled 'Go Time' for Discrimination Claims? Fallout From the Ledbetter Act. The article, in its entirety, can be found here. 

The authors note that federal courts have decided forty-seven cases interpreting the new statute, and they see a consistent approach beginning to emerge. Courts are limiting the application of the Ledbetter Act in several ways.

1. courts are reluctant to apply the Ledbetter Act when a plaintiff fails to demonstrate a prima facie discriminatory act;
2. courts will not apply the Act where the claim concerns something other than wage or compensation discrimination;
3. even where courts are applying the Act to revive an untimely claim, many ultimately deny plaintiff's claim for failure to demonstrate a prima facie discriminatory act;
4. courts are reluctant to expand the scope of the Act to claims arising outside of Title VII, ADEA, ADA, or "parallel" state anti-discimination laws;
5. courts will not allow a plaintiff's knowing and voluntary vwaiver of an ADEA claim to be reviewed by the Ledbetter Act.

None of the above is surprising, and the pattern emerging appears to mirror the intentions of the Act.

The authors also raise the issue of something which I have discussed in other posts, articles and presentations - what is meant by other practices. They state

... though it has yet to be a focal point of litigation, the Act's nebulous reference to "other practice[s]" appears destined to spawn a wave of claims by employees unable to prove that their superiors have rendered a discrete discriminatory "decision," but have engaged in some other discriminatory compensation practice. We have by no means reached the end of the interpretive road, and employment practitioners will be watching the evolution of Ledbetter interpretation for years to come.

I couldn't agree more. The precise definition of 'other practices' is a thorny issue that will surely be the subject of much discussion and debate. As plaintiffs bring claims related to 'indirect determinants' of compensation, such as grade assignment, department or division assignment, etc., courts will be faced with deciding what is meant by 'other practices', the impact these other practices have on compensation, and whether these arguments relating to indirect determinants have any merit.

A Practical Guide to Compensation Self-Auditing eBook Now Available on Lulu

My eBook "A Practical Guide to Compensation Self-Auditing: Understanding the How and Why of Compensation" is now available on Lulu. The eBook provides a thorough discussion of compensation self-auditing, including:

• why you should conduct a compensation self-audit;
• the self-audit framework: how are individuals compensated and why are individuals compensated at different rates;
• understanding and constructing similarly situated employee groupings;
• edge factors;
• data measurability and availability, and choosing and using proxy variables;
• data collection;
• multiple regression analysis;
• practical and statistical significance;
• conducting follow-up investigations;
• developing and implementing an ongoing compensation monitoring program.

The information is provided in a non-technical manner, and is intended for readers with little to no quantitative background.

The eBook is available on Lulu and can be found here. A preview is available, and includes information about the author, the table of contents, and the complete introductory section.

Workplace Class Action Litigation: Pro-Active Planning 'Critically Important'

On January 12, 2010, Seyfarth Shaw announced the availability of their Sixth Annual Workplace Class Action Litigation Report.  Information about this report can be found here:

http://www.seyfarth.com/ClassActionReport/

A press release issued by Seyfarth Shaw highlights the increasing number of class action and collective action matters filed, as well as the financial exposure these matters present to employers:

"Since we began publishing this annual report six years ago, both the number of cases filed and the financial exposure that they pose to companies has increased exponentially," said J. Stephen Poor, Chair and Managing Partner of Seyfarth Shaw.  "As plaintiffs' attorneys bring increasingly sophisticated litigation against employers that combine claims under multiple statutes, the financial exposure is only going to become greater for businesses."

Regarding this year's report, Gerald Maatman, Jr., Co-Chair of the firm's Complex Discrimination Litigation Practice Group states:

"One certain conclusion drawn from this year's report is that employment law class action and collective action litigation is becoming ever more sophisticated and will continue to be a source of significant financial exposure to employers well into the future... [G]iven the enormous financial stakes, pro-active planning and legal compliance programs - to get ahead of class action risks - are critically important for businesses in 2010."

Developing an employment litigation risk assessment and management plan is an important component of your overall business strategy.  Minimax Consulting has more than a decade of experience in the statistical analysis of wage and hour issues and employment decisions, including hiring, promotion, termination, and compensation.  If you are interested in incorporating a formal statistical analysis as part of your compliance and litigation risk management program, please contact me for a consultation.

Synopsis of "Manager Race and the Race of New Hires"

I recently came across an article in the Journal of Labor Economics that examines the relationship between manager race and the race of new hires.  The central question of this analysis is whether or not the race or ethnicity of the hiring manager a determinant of the racial and ethnic composition of new hires.  The authors of the article - Laura Giuliano, David Levine, and Jonathan Leonard - examine this question using "personnel data from a large U.S. retail firm".  Based on their analysis, the authors conclude:

• Non-black managers (i.e., whites, Hispanics, and Asians) hire more whites and fewer blacks than do black managers;
• Hispanic managers hire more Hispanics and fewer whites than white managers in locations where Hispanics make up at least 30% of the population.

Three primary explanations are offered by the authors.  First, managers may use racially segregated social networks when recruiting applicants. To test for managerial hiring networks, the authors "assume that there is some congruence between social networks and residential proximity, and we ask whether managers tend to hire employees who live near them".

Second, if manager-employee similarity improves employee productivity, managers may hire racially similar employees for efficiency purposes (referred to as 'statistical' discrimination).  Finally, both managers and employees may engage in 'taste-based' discrimination (indulging personal preferences).  The authors note that these explanations are not mutually exclusive and "it is difficult to distinguish between them empirically".

This analysis may have potential implications for the use of statistical analysis in race discrimination litigation.  If the authors' conclusions are correct and one cannot differentiate empirically between 'statistical' and 'taste-based' discrimination, one could not determine empirically whether the observed racial patters are attributable to "efficiencies" or personal preferences.