Fair Pay Act roils workplaces

President Obama signs the Fair Pay Act surrounded by members of Congress and catalyst Lilly Ledbetter, mired in a pay gap at Goodyear, at center behind him. The bill forces employers to better justify and document pay decisions.

Associated Press

President Obama signs the Fair Pay Act surrounded by members of Congress and catalyst Lilly Ledbetter, mired in a pay gap at Goodyear, at center behind him. The bill forces employers to better justify and document pay decisions.

By the numbers

$38.6 million

salary of the highest-paid woman in 2007 (Sharyn Gasaway, executive vice president/CFO of Alltel), according to Fortune magazine

$350.7 million

salary of the higest-paid man in 2007 (Stephen Schwarzman, chairman of Blackstone Group), according to Fortune

MIAMI — One of the first bills that President Obama signed, the Fair Pay Act, could result in more women suing over being paid less than men. This new activity in the Capitol has stirred conversations in boardrooms, law offices, factory floors — even newsrooms. Why aren't women earning as much as men, and should salaries be openly discussed?

Richard Tuschman, a South Florida labor lawyer, says until women make different choices, their incomes won't rise, no matter how many bills are signed into law. By choices, he's talking about the careers they pursue, the hours they work, the jobs within their industries they hold and the parenting decisions they make.

"I'm not suggesting some women don't get paid equal for the same work as men," Tuschman says. "But the numbers being bandied about suggest it's a huge problem and that's just not the case."

I challenged Tuschman to walk into almost any sizable workplace in South Florida and peruse the payroll. I'm convinced he would find pay discrepancies between men and women in the same jobs. As a business writer, I've plowed through public-company records, talked to business owners and asked people at all levels for salary information. Walk into a corporate law firm, I told him, and you will see that I am right.

But Tuschman comes back with the argument that many female lawyers choose to work flexible schedules and reduced hours. They also choose less lucrative areas of law and he adds, "men have had better networks to build business so they tend to earn more money."

It is almost universally accepted that mayhem would ensue in a law firm or any workplace if people knew what their co-workers were making. Salary information traditionally is more guarded than a celebrity's home number. Those pushing for equal pay for women think that should change.

Financial guru Suze Orman is a proponent of openly discussing salaries. Orman told ABC's 20/20 that secrecy about salaries has made it easier for corporations to protect their bottom lines and to discriminate against women. She thinks employees could protect and empower each other by sharing salary information and confronting a boss if there are major discrepancies.

In fact, the Fair Pay Act stems from a lawsuit involving secrecy over salaries. Lilly Ledbetter, who worked at Goodyear for 19 years, learned in an anonymous note that she was earning 40 percent less than her male colleagues with the same job. The bill would force employers to better justify and document their pay decisions.

Let's look at the highest levels of corporate America. On Fortune's list of the 25 highest-paid women, the top spot is held by Sharyn Gasaway, executive vice president/CFO of Alltel, who earned $38.6 million in 2007. The highest-paid man, Stephen Schwarzman, chairman of Blackstone Group, earned $350.7 million — more than nine times as much. Even the two men on the list who work at Gasaway's company earn almost twice what she makes.

The numbers most often used are those among full-time workers: Women make 77 cents for every dollar paid to men. But there are many, like Tuschman, who think those numbers are bogus because of all the trends that factor into the pay gap. Women with college degrees tend to go into fields like education, psychology and the humanities, which typically pay less than sectors preferred by men, such as engineering, math and business.

To help close the pay gap, Ann Barnes, a compensation consultant and managing Partner of Altura Consulting Group, has this idea. She says if pay disparity is caused by women's under-representation in high-paying fields, we need to take a new approach. Use the dollars legislators are willing to throw at this issue to attract more women to these critical and high-paying fields, she says.

"There's been so much focus on catching and punishing employers for discrimination and not enough focus on addressing root causes."

At some enlightened workplaces, committees review salaries to make sure there is equity. Many government salaries are public knowledge, and that tends to minimize huge gaps.

Barbara Locke, with the Miami law firm of Ehrich Locke Law, has another idea to close the gap. After 20 years at the large law firm of Holland & Knight, she says it will take an enlightened man at the top to remedy pay inequality. "It really needs to come from the top down, and it rarely does."

Locke also thinks women need to be more assertive about equal pay and raises. She says a lot of women think that as long as they are paid somewhat fairly, they won't push to find out what others make. "This is a difficult issue," Locke says. "I think it will have to be legislated because it doesn't seem to be happening on its own. It may take another generation, or two or three."

Fair Pay Act roils workplaces 02/22/09 [Last modified: Sunday, February 22, 2009 9:26pm]

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