Problem: What should an organization consider when implementing the new Colorado Equal Pay Act?
March is Women’s History Month — a time when we recognize the contributions women have made throughout history and reflect on the work that still needs to be done to achieve equity in the United States. Despite women’s progress in educational attainment, they still trail behind men in economic outcomes for similar work.
Female enrollments in higher education have grown significantly over the past decade. At UCCS, 54 percent of our student body is female and we have seen a considerable number of women business students taking leadership positions in their classes and clubs. Yet, this equal access to higher education is not leading to equitable compensation once they enter the workforce.
Women still earn approximately 18 to 20 percent less than their male counterparts and this number is much more significant for women of color. Unfortunately, employment statistics have only worsened this past year. We witnessed a sharp increase in female unemployment during the coronavirus pandemic and women left the labor market at disproportionate levels as they assumed the majority of the unpaid caregiving roles during COVID-19.
A female’s $0.82 to a male’s $1 may seem like a matter of cents. But when you look at the cumulative impact of the pay gap across a women’s career, the numbers are staggering. According to American Community Survey data from the U.S. Census Bureau, women in Colorado earned $12,193 less than men in median annual earnings for full-time, year-round workers. Women with a bachelor’s degree earned even less than a degree-holding male — a $23,222 discrepancy. No matter the degree of educational achievement, the story remains the same: Women earn less than men once they enter the workforce.
These numbers contribute to real financial setbacks that go beyond a simple cent-to-dollar ratio. The difference in lifetime earnings could be what separates a woman from retirement, a higher level of education, property investment or achieving economic security.
So, how do we ensure that our female professionals can enter the workforce and receive fair compensation?
Earlier this year, Colorado enacted the Equal Pay for Equal Work Act, which calls on businesses to reevaluate their pay structures and develop a more transparent and equitable practice for determining employee wages. Businesses of all sizes are being asked to review their pay structures and make efforts to amend discrepancies.
At a minimum, businesses will need to eliminate known disparities, develop processes to avoid new inequities and provide salary transparency for future positions.
While this act may impose short-term challenges for implementation and long-term compensation investments, the ability for all workers to earn equal pay for equal work is long overdue.
I have outlined several considerations to support equal pay and legislative compliance:
• Audit your pay structure and hiring practices.
Take a deep dive into your current policies — look at your job descriptions, salary ranges, employer handbooks, benefits and historical data. Analyze the information to remedy dated practices or salary discrepancies. Make sure there is coordination in assigning new salaries and that they are reflective of a candidate’s skills and experience. Businesses may also have to adjust current employees’ pay to improve equity across the company’s pay structure.
• Communicate the organization’s plan to comply with this legislation.
As you post new positions with visible salary ranges, current employees may begin to question the fairness of their salaries. Discuss these new policies openly with your employees and give them opportunities to share concerns and feedback. Additionally, employees with hiring and supervisory responsibilities should be trained to follow and articulate the new pay equity guidelines to avoid common compliance mistakes, such as requesting historical salary data as part of the hiring process.
• Shift the mindset.
On issues of equity, I believe it is important for business leaders to set the tone that addressing this problem will be good for business and workers.
The long-term benefits of this legislation will create a positive path forward for your organization’s pay practices and employee outcomes. When each employee is compensated according to their position, skills and experience, the organizational culture, employee satisfaction and retention are likely to improve. They can then contribute to our region’s economic activity more equitably, and build a better future for people of all genders in Colorado Springs.
Dr. Karen S. Markel is the dean of the UCCS College of Business.