By now, you’ve almost certainly heard about or read the infamous memo written by a (now former) Google employee voicing his opinions on the efficacy of the company’s diversity initiatives and the cause of the gender pay gap. Regardless of whether you agree with his perspective on the gender pay gap, or how Google handled the aftermath, this viral memo brings the topics of unconscious bias, pay equity, and diversity to the forefront of our national conversation about the workplace.
Unconscious bias refers to the feelings or thoughts we have towards other people, derived from stereotypes and prejudices, which arise without awareness or intent. If unconscious bias influences compensation decisions, what can employers do to work toward pay equity? One solution is to support pay transparency. Pay transparency means that employers should be upfront and clear about salary and compensation decisions and not impede employees’ rights to share salary information with one another. In fact, numerous states—including California, Maryland, Massachusetts (effective July 1, 2018), New York, and Vermont—have recently enacted legislation requiring pay transparency in the workplace, while several other states and local jurisdictions have bills pending that would impose similar requirements. Companies working on federal contracts or subcontracts that are necessary to the performance of federal contracts are also subject to pay transparency requirements. In fact, the National Labor Relations Act has stated for years that employers may not prohibit non-managerial employees from sharing compensation information. Under these laws, employers must permit employees to ask questions and disclose information about their own wages or the wages of other employees, and cannot retaliate against them for doing so (excepting, of course, those employees whose job requires them to have knowledge of others’ compensation, such as HR representatives and payroll personnel). These laws support the theory that shining a light on such information undercuts our unconscious biases and prevents pay disparities that might arise based on protected class status. After all, once someone has raised their own awareness of an unconscious bias, the issue is now susceptible to being addressed and corrected.
Regardless of whether your state has a pay transparency law or you are subject to the government contractor pay transparency laws, it is a recommended best practice to institute pay transparency policies. Creating an environment where employees are able to ask questions and are informed about the basis for compensation decisions can go a long way in creating a more inclusive work environment, combatting unconscious basis, and ensuring that your pay practices are not swayed by unlawful factors. If you are transparent about such issues, any memo or grievance written by an employee regarding your diversity initiatives and biases will not cause the same kind of furor as was generated by the Google memo because the information is already out there and available to all.
Another piece of the puzzle is training. Human resources personnel and managers involved in hiring and making and monitoring compensation decisions must have a bedrock understanding of the legal requirements surrounding pay equity. They also need to have an awareness of the possible effect of unconscious basis. Once these individuals have the right tools, they will be able to recognize these biases and ensure that unfair or illegal motivations—even unconscious ones—do not impact hiring, job advancement, and compensation decisions.
Pay transparency and unconscious bias training are also important because there must be buy-in from decision makers in order to promote change. Studies have stressed the importance of having white males as allies in the pay equity fight; those who are affected need the support from those who can effect change to make it happen. See, e.g., Bentley University Center for Women and Business, “Men as Allies: Engaging Men to Advance Women in the Workplace” (Spring 2017); Catherine Ashcraft, et al., “Male Advocates and Allies: Promoting Gender Diversity in Technology Workplaces” (2013).
When unconscious bias and pay secrecy permeate your workforce, negatively impacted employees may take their talents elsewhere. With all of the current attention surrounding equal pay issues, employees are increasingly expecting their employers to be committed to pay equality, including complying with equal pay laws. This means addressing unconscious bias upfront. The 34 companies that have already signed the Paradigm for Parity as of February 2017 to pledge support for equal pay and a diverse and inclusive workplace clearly recognize the business imperatives at issue. Similarly, companies whose boards of directors and stakeholders require the publication of pay statistics may be required through their own corporate policies to provide pay data in an open forum.
Creating a culture of openness about pay practices will not only minimize the negative impact brought about when employees challenge equal pay and diversity initiatives like Google experienced, but will also prepare you to comply with more aggressive initiatives from your corporate governing bodies—not to mention ensuring that your company is compliant with federal and state equal pay laws.