The notion of comparable worth seems to be back on the agenda in a big way, particularly in the wake of the recently released AAUW study “Behind the Pay Gap” which generated attention with its finding that female workers earn less than their male counterparts, even just one year out of college and within the same major/disciplinary field. There is a call for strengthened national legislation to address gender discrimination, with proponents citing Minnesota’s State Employee Pay Equity Act as a model for correcting marketplace discrimination. And here in Minnesota, a group of legislators and the Pay Equity Coalition are working on expanding the requirements of the Pay Equity Act to all private companies that do business within the state.
Dr. Ellen Benjamin, President and Founder of Benjamin Consulting Group, Inc., is a compensation expert with over 20 years of private and public sector consulting experience that includes helping Minnesota government employers develop and implement pay programs that comply with Minnesota’s Pay Equity law. She has agreed to share her experience and knowledge in this interview, to help us better understand the workings and potential impact of pay regulations like those in place in our state.
Q: Can you give us a brief overview of Minnesota’s Pay Equity law, in your own words?
A: The Minnesota Pay Equity law requires public sector employers (e.g., cities, counties, agencies) to conduct a pay equity study every few years and to make the indicated adjustments to pay for female-dominated jobs. The study involves using a job evaluation tool with State-specified factors to compare jobs on dimensions such as complexity of issues encountered, depth/breadth of knowledge needed, nature of interpersonal contacts, and physical working conditions. Employers can create their own job evaluation tool, utilize a tool developed by an outside consultant, or use State job matches. An analysis is then done using a State-developed regression tool to examine how female-dominated jobs are paid against male-dominated jobs of comparable job evaluation-determined content. Any female-dominated jobs that fall below a given level against this regression analysis must be adjusted.
Q: Based on your experience, how well do these required steps address and/or prevent pay discrimination?
A: From a State compliance perspective, completing these periodic studies can show which female dominated positions fall outside the overall pay practice of an employer. I do not think, however, that compliance with the State Pay Equity law is sufficient foundation for an employer to assume that there are no pay discrimination issues. Discrimination goes beyond gender. The State’s requirements do not consider employee elements such as age, race, or linkage to performance. You could be in compliance with the State’s requirements and still have other forms of pay discrimination. For example, in Minnesota, some employers have found male-dominated jobs that fall notably below the overall male regression analysis. They are not, however, required to make any adjustments for those positions. I do not professionally consider that to be an equitable response.
Q: In my experience, it isn’t unusual – when developing and implementing pay programs – to run into situations where internal equity or considerations must be reconciled with external market pay practices. How are these situations addressed under Pay Equity law?
A: The focus of the State Pay Equity law is on internal equity. One can broadly assume that the pay levels currently in place reflect the external marketplace to varying degrees. However, the entire pay equity movement argued that the external market is biased against female dominated jobs and therefore the focus has shifted to internal pay relationships.
Q: What would you see as the potential implications – positive and negative – of extending regulation like Minnesota’s Pay Equity Act out into the private sector?
A: Based on my experience in helping public and private sector organizations utilize job evaluation tools and market pay data to find a reasonable balance between the two, I am reticent to support a private sector mandate such the Minnesota approach in its current form. The manner in which the Minnesota Pay Equity Act is defined will not be sensible for the private sector. There are simply too many differences in the compensation needs and practices among private sector employers to make it a “one size fits all.” On the positive side, however, it will require private sector employers to pay more attention to internal pay relationships based on defined job elements. My greatest concern is that it will serve as a set of handcuffs for the private sector—handcuffs that may be expensive, administratively burdensome, and not an advantage to anyone in the final analysis except compensation consultants. The challenge for any employer is to find a balance of market and job content that is both cost-effective and yet allows them to attract, motivate, and retain the quality talent they need to succeed.
Benjamin Consulting Group, Inc. is based in Minneapolis and serves private and public sector clients regionally and nationally. Dr. Benjamin is a Licensed Consulting Psychologist with a specialization in linking employee behaviors and rewards. She can be contacted at [email protected] or at (952) 928-0871.