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Unequal Pay in the Us

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Submitted By tcollins09
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Summary of Law
According to the Lilly Ledbetter Fair Pay Act of 2009, women in the US are paid 77 cents to every dollar that men are paid (The Lilly Ledbetter Fair Pay Act of 2009, 2009). African-American women on the other hand, earn 64 cents for every dollar, while Latina women earn 55 cents per dollar earned by men. The Equal Pay Act of 1963 (EPA) was created to require that men and women in the same workplace be given equal pay for equal work (U.S. Equal Employment Opportunity Commission, n.d.). The forms of pay are also covered by this law and include salary, overtime pay, bonuses, stock options, etc. (U.S. Equal Employment Opportunity Commission, n.d.).

Unfortunately, today we still experience the unfair practice of unequal pay. To address this issue, in 2009, President Obama signed the Lilly Ledbetter Fair Pay Act. The purpose of this act was to restore the discrimination caused by the ruling in the Ledbetter v. Goodyear Tire & Rubber Co case (The Lilly Ledbetter Fair Pay Act of 2009, 2009). The Lilly Ledbetter Fair Pay Act gives individuals the power to challenge pay discrimination and forces employers to eliminate any discriminatory pay practices (The Lilly Ledbetter Fair Pay Act of 2009, 2009).
Relevance & Importance
The issue of wage gap and discrimination is one that not only affects women globally, but it also affects the economy in the United States. The Center for American Progress published an article explaining the varying reasons why Equal Pay is important in regards to the economy and state of welfare (Six Reasons Why Equal Pay is Still Important, 2009). They list the following that;

Lower earnings will make it difficult for women to take care of their families. By paying women fairly, income for women both single and married, would increase between 5-20%. This would result in a decrease in poverty levels for single mothers by over 50% (Six Reasons Why Equal Pay is Still Important, 2009).

Benefits pegged to salary are lower for women, affecting those women who wish to retire or become ill (Six Reasons Why Equal Pay is Still Important, 2009). The Center for American Progress reported that today, the gap between the average retirement income that men and women receive annually is a staggering $8,000 (2009). This gap limits the financial support needed if there is no other financial support available.

Families are also becoming more dependent on women’s salaries due to men losing their jobs are higher rates. In addition, women with more education are losing a more income (Six Reasons Why Equal Pay is Still Important, 2009). This combination is causing a need to justify women having to invest in higher education.

They go on to list that lower wages for women hurt men, as they have to work longer hours in order to cover the lower wage of their wives. And lastly, lower wages for women hurt the society by also lowering the amount of funding given to state and federal social programs funded by income and wage taxes (Six Reasons Why Equal Pay is Still Important, 2009).
Ethical Challenge(s)
One ethical concern associated with this issue is pay secrecy. As a way to avoid accusations of wage discrimination, employers have implemented contract terms which prohibit or discourage employees contractually, from discussing their pay with their colleagues (Women’s Bureau, U.S. Department of Labor, 2014). This is an unethical practice and one that hides this issue, which is against the law. For example, as a female Sourcing Analyst, I have over 4 years of experience in this field. If a man is hired after me for the same position but has zero experience, the terms within the contract that I sign with my employer, prohibit me from asking my co-worker or discussing anything related to our pay. If I do ask, that may be grounds to termination, regardless of the fact that my counterpart, as a male, may have a higher salary than me simply because I am a woman and more than likely earn less. The Lilly Ledbetter Fair Pay Act and the Equal Pay act, fight to find ways to remove practices such as these.
Practical Implications
If at any point one feels that they are experiencing wage discrimination, a pay disparity suit can be filed under the Equal Pay Act. Because this act was passed as an amendment to the Fair Labor Standards Act, is therefore enforced by the U.S. Equal Employment Opportunity Commission (Jones, 2009). Unfortunately, even with the Lilly Ledbetter Fair Pay Act, a worker only has up to 3 years to file and be rewarded a claim. From my research, I have learned that 3 years or 300 days, is still too short of a time span, however if accused during that timeframe, the organization may be responsible for back pay for up to two years preceding the filing of the charge (Jones, 2009). For federally funded business, these implications are stricter more so than the private sector.
Recommendations for Managers
As a manager, using the distributive justice is the appropriate process to follow in order to ensure that they are following the requirements set forth by the Equal Pay Act. The distributive justice rules bases judgments and decisions fairness. For example, the wage I receive as a Sourcing Analyst with previous experience would be expected to be higher than that of someone with no experience. The rules of fair process, therefore reflects whether the proper norm was used when making decisions regarding pay, rewards, promotions, etc. This would be my recommendation to a new manager, as it also avoids of unfair wage practices, therefore following the requirements outlines in the Equal Pay Act.
Bennee Jones of Andrew Kurth also lists recommendations to consider in order to avoid illegal actions being made from wage discrimination. Jones stresses first to review the compensation practices currently used within the organization to ensure that all there is no discrimination. Secondly, Jones advises that employers should develop guidelines for compensation that is applied consistently across the organization. By then monitoring the compensation decisions and training personnel, managers and those in leadership positions within organizations can better avoid claims of wage discrimination.
Suggested Resources

Colquitt, J.A., Lepine, J.A., & Wesson, M.J. (2015). Organizational behavior: Improving performance and commitment in the workplace (4th ed.). New York, NY: McGraw-Hill Irwin.

Six Reasons Why Equal Pay is Still Important (2009).
Retrieved from https://www.americanprogress.org/issues/women/news/2009/01/15/5476/six-reasons-why-equal-pay-is-still-important/

The Lilly Ledbetter Fair Pay Act of 2009 (2009).
Retrieved from http://www.nwlc.org/resource/lilly-ledbetter-fair-pay-act-0

U.S. Equal Employment Opportunity Commission (n.d.).
Retrieved from http://www.eeoc.gov/laws/types/equalcompensation.cfm

Women’s Bureau, U.S. Department of Labor (2014).
Retrieved from http://www.dol.gov/wb/media/pay_secrecy.pdf)
Jones, B. (2009). Lilly Ledbetter Fair Pay Act of 2009: Employers, Fasten Your Seatbelts. Retrieved from http://www.andrewskurth.com/pressroom-publications-607.html

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