A pay equity bill that aims to close the gender pay gap by changing workplace standards for salary disclosure is scheduled for debate and a possible vote in the state Senate this week.
Along with requiring businesses to post minimum salaries for open positions, the bill would prohibit employers from requesting potential employees’ salary histories. Employees would also be permitted to discuss or inquire about their salaries openly.
Proponents cite requests for previous salary number as damaging for groups that have historically been underpaid. “Statistically, if you’re a woman and you’re working, you’re not getting the full value of the work that you’re getting paid to do,” said Katie Donovan, founder of the Medford firm Equal Pay Negotiations.
Donovan calls low prior salaries “anchoring” salaries, which can influence the offers they receive. In some cases, a low incoming salary may be viewed as an indicator of poor performance, Donovan said, when the applicant may have simply been underpaid for their previous work.
“The data show that these gaps and disparities happen, and not just because there’s discrimination within promotions, although there’s certainly work to be done to ensure that we’re being inclusive,” said City Council President Michelle Wu. “The disparities begin when women and people of color tend to be hired at lower salaries that their counterparts.”
Salary discrimination by gender is prohibited under state and federal statutes, most notably the 1963 Equal Pay Act, but advocates have long since tried to strengthen the law by enacting practical safeguards, usually involving increased pay transparency. The push in Massachusetts has resulted in several bills being proposed to clarify what is meant by “comparable work.”
A new version of the pay equity bill left the Senate Ways and Means Committee last Thursday, and it included a section that clarifies what constitutes “comparable work” – it “is substantially similar in content and requires substantially similar skill, effort, and responsibility and is performed under similar working conditions; provided, however, that a job title or job description alone shall not determine comparability.”
The fine for pay equity violations would rise from $100 to $1,000.
The bill’s sponsor, state Rep. Jay Livingstone (D-Boston), said the increased pay transparency offers protection to employers as well. “What we hope this will do,” he said, “is encourage employers to undertake that review on their own, and if they find any problems, fix them.”
More than 50 Boston companies signed a 2013 compact to commit to assessing and reducing wage gaps in their businesses, including submitting salary data for third-party monitoring.
Nationally, women were paid about 79 percent of men’s earnings, according to the American Association of University Women’s (AAUW) Fall 2015 review of the wage gap. Massachusetts squeaks above that rate with women earning 82 percent, but also boasts the highest average male earnings of the 50 states – $61,611 – and the third highest average female average – $50,459, according to AAUW data from the United States Census Annual Community Survey.
Some of the gap differential can be explained by women making different choices of careers and experiencing greater work interruptions for child-rearing. But a portion of the pay gap remains widely attributed to gender bias, even correcting for factors like education level and career field.
The Boston City Council’s four female councillors – Michelle Wu, Ayanna Pressley, Andrea Campbell, and Annissa Essaibi George –expressed their support for the legislation to the Reporter. And a supporting resolution was introduced at Wednesday’s council meeting by at-large councillor Pressley.
Referencing the Brookings Institution report ranking Boston at the top of the nation’s largest city in inequalities, Pressley said this bill is well-timed. “Certainly the wage gap contributes to that,” Pressley said. “This is long overdue, and this is vital to the stabilization of our families and the growth and stabilization to our economy.”
Pay equity is particularly pressing in households headed by women, said Wu. Families headed by women with no husband present make up 35.5 percent of all family households, according to the Boston Redevelopment Authority’s 2015 report, and those female-headed households make up 64.3 percent of all families in poverty in Boston.
The realtor Mary Kelly, head of the All Dorchester Women’s Professional Network, said she sees women every day unable to afford to buy homes on their salaries. “It’s just a huge piece of being able to stabilize family.”
The freedom to discuss salaries openly is one of the bill’s major plusses, said Kelly. “It think it’s really crazy because that’s the reason it was in the shadows for so long, that you didn’t know that the person sitting in the cubicle next to you was making more than you.”
At-large Councillor Essaibi-George said that while she is firmly supportive of the bill, she understood the potential discomfort for business owners in regard to open discussions of salary.
Essaibi-George owns the Stitch House in Dorchester and comes at the topic from a small business background, where pay differences can seem intensely personal. “It’s a change, and change can sometimes be uncomfortable,” she said. “Even though it’s the right change to make.”
The Associated Industries of Massachusetts, the state’s largest business group, supports pay equity as an ideological stance but dismisses the pay equity bill as unnecessary in light of existing mechanisms. A spokesman for the group, Christopher Geehern, told the Reporter that some process issues remain that will unduly strain business in making new hires.
“It’s pretty important for employers in the hiring process to get a sense of potential employees’ previous salaries,” Geehern said. “It’s a proxy for a person’s success in a previous company or on previous assignments.” He added that in his experience, employers are looking for positive trends rather than the numerical value and want to have access to the most information as possible during an interview.
For her part, state Rep. Ellen Story (D-Amherst), also a bill sponsor, said, “We have listened to the criticisms from people like the Associated Industries of Massachusetts and some of the business groups who are nervous about what this could mean to their bottom line. We have tailored it as carefully as we can so that it won’t be a burden, but it will be fair.”