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The pay disparity that could spell trouble for Finance

Jennifer Azara
by Jennifer Azara
December 2, 2011
  • Employment Law
  • Payroll
2 minute read
  • SHARE ON

It’s not 1975 anymore, but in many cases women are still earning less than their male counterparts. And that can be a problem for Finance. (Though it isn’t always.)

No one’s saying that everyone on your payroll holding the exact same position is going to have the exact same paycheck. But if there’s too great a disparity that can’t be clearly accounted for, your company could have a problem on its hands.

You could end up being in violation of the Equal Pay Act.

And while you may not set the salaries, you may well be in a position to spot and point out any potential discrepancies.

There are several common exposures to watch out for, according to a recently-released report by the Government Accountability Office (GAO): Gender-Pay Differences: Progress Made, but Women Remain Overrepresented among Low-Wage Earners.

Use its findings to know what to keep an eye out for. Here are two of the biggest risk factors which could signal you have a problem passing through your payroll department.

Risk #1: Lesser-educated workers

If you have folks on the payroll with a high school degree or less, be careful: You may also have some pay inequities between male and female employees.

That’s the group which has the largest gap between what men and women doing the same job earn.

So it’s something you want to watch for sure. But warn your staffers: It’s not necessarily an issue of wage discrimination. Often women in this group work part-time, meaning that by the end of the year they’ve simply worked fewer hours than their male counterparts – explaining the discrepancies away.

Risk #2: Complicated pay structures

The other end of the spectrum is another potential hotbed for pay missteps, according to employment law experts.

You have to keep an eye out for employees who receive a mix of compensation, such as a base salary and commissions or other performance-based comp.

If you have two people doing the same job but one has a higher base salary and less variable comp, while the other depends much more heavily on the variable component (which probably took a serious hit in this economy), your company may unknowingly be setting up an unequal pay dynamic.

Again, there may be a perfectly reasonable explanation for the differences. But if you notice your company does have arrangements like this, it’s worth raising a hand.

You could sidestep a lot of headache and expense.

 

 

Jennifer Azara
Jennifer Azara
Jennifer, a member of the CFO Daily News staff, has covered business and finance for more than 22 years. She has written for CFOs, credit and collections professionals and accounts payable practitioners and has spoken at industry conferences on sales and use tax compliance.

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