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Bay Area Human Resources Services

California Judge Advances Gender Pay Equity Case

By denying a motion by Google to dismiss the plaintiffs’ second attempt to plead a class action lawsuit related to gender pay discrimination, a California Superior court has allowed a highly visible gender pay equity case to proceed.

Background

In September 2017, multiple female plaintiffs filed a complaint as a sweeping class “All Women Employed by Google in California”.  The complaint alleged a gender pay gap citing a statistic that women in the United States are paid on average $0.79 for each $1.00 paid to a man.

Google argued that the complaint should be dismissed based on the fact that the plaintiffs failed to establish the sufficient community of interest to form the legal definition of a “class” of plaintiffs due to the broad categories of employees.  The court granted Google’s motion to dismiss the class allegations in the first round, but granted the plaintiffs the right to amend the complaint within 30 days.

In the amended complaint, the plaintiffs added allegations that Google maintained a class-wide policy of using prior salary to set the initial salary for new hires.  This policy, according to the plaintiffs, perpetuated existing pay differentials which served to discriminate against female employees.  The “class” in the pleading covers 30 separate job positions which were allegedly impacted by this global policy of considering prior salary history. (Of course, considering prior salary history is a common practice in many industries and by many employers).

Despite Google’s arguments to the contrary, the court found that the plaintiffs adequately defined a “class” based on the companywide policy of considering prior salary.  The court accepted the plaintiffs’ argument that this policy perpetuated the historical pay disparity between men and women.  The plaintiffs further argued that female employees received a lower starting salary than male employees in the same job position and that they were assigned lower job levels (with lower salaries) than men who were performing substantially equal or similar work.  Google, like most employers, based merit increases as a percentage of an employee’s current base compensation which, according to the plaintiffs, served to perpetuate and widen the gender pay disparity over time.

The plaintiffs further argued that Google’s policy amounted to “intentional discrimination” because Google allegedly applied stereotypes regarding jobs open to women or what jobs women could or could not perform verses men.

Significance

This case, while only in the early stages of litigation, will likely become a landmark case.  It provides cause for concern on several levels for employers.  First, the court allowed a very wide and disparate group to be considered a “class” of plaintiffs due to a global policy common to many employers.  Next, the court found that a policy of considering prior compensation might lead to a finding of “intentional discrimination”.  This could mean significant damages and legal fees if the plaintiffs are successful.  Employment litigation has fueled social change in many examples over the last 25 years and this could be yet another.

California has one of the toughest pay equity laws in the country requiring equal pay for “similar work”.  From a case law perspective, the issues at play in this case could set a precedent and further define the meaning of these terms. This case could also have implications not only under California law, but also under the Federal Equal Pay Act according to Attorneys at the law firm of Seyfarth Shaw.

This issue received national attention on an April 2018 segment of 60 Minutes, wherein Salesforce was showcased for proactively addressing the issue of gender pay equity.

Employers would be well advised to begin to look at their gender pay practices as well as their hiring policies.  Most employers know that effective January 1, 2018, in California, hiring managers can no longer ask about prior salary history.  On the other hand, employees of many employers hired prior to January 2018 could be subject to the theory of “intentional discrimination” under the Google plaintiffs’ pleadings.

Paul Finkle, CMC, SPHR – Executive Vice President

Disclaimer: Some information contained herein has been abridged from numerous sources and may be protected by various copyright laws. Such information should not be construed as consulting or legal advice. Please contact our office for specific advice and/or referrals.

Bay Area Human Resources Services

Employee Engagement – Questions You Should Be Asking Your employees

According to Wikipedia, employee engagement is a fundamental concept in the effort to understand and describe, both qualitatively and quantitatively, the nature of the relationship between an organization and its employees.  A producer of employee feedback technology puts it more eloquently:

“Employee engagement represents the levels of enthusiasm and connection employees have with their organization. It’s a measure of how motivated people are to put in extra effort for their organization, and a sign of how committed they are to staying there. Importantly, employee engagement is an outcome that depends on the actions of an organization, particularly the actions driven by leadership, managers, and people teams.”

There are numerous studies which show that there is a strong corollary between high employee engagement and organizational success.  Employee engagement positively effects success factors such as

  • Customer Service
  • Effective Communications
  • Employee Productivity
  • Continuous Quality Improvement
  • Innovation
  • Strong Sales and Marketing Capabilities

Unfortunately, a recent study from Harvard Business Review found less than a quarter of businesses believe their employees are highly engaged within the organization. That number is even more astonishing when you consider a Gallup poll that found the percentage of engaged employees was at 32% in 2015 and 31.5% in 2014. The trend of low employee engagement has existed for years. The same Gallup poll noted the percentage of engaged employees has remained under 33% since they began tracking the metric 15 years ago.

One theory as to why some employers are more successful than others in driving higher employee engagement is their appreciation of generational differences in the workforce and recognition of what motivates one group may not be the same as another.  These employers regularly survey their employees regarding workplace issues and desires.

For example, if one looked at employee engagement survey results from ten years ago, one might have considered investing in ping pong tables and climbing walls.  While these perks are still in vogue for some startups, the magazine, HR Today reports that younger employees desire better mentoring and collaboration opportunities. Employers would likely to be willing to provide these areas – if they only knew they should do so. Thus, evaluating employee engagement is as important as ever.

Culture Amp’s white paper, 20 Employee Engagement Survey Questions Every Company Should Ask, provides insight into helpful information to retrieve from your employees.  The first five questions are what they call “Index Questions” which, when combined, give a broad indication of engagement.

  1. I am proud to work for _______________
  2. I would recommend _______________as a great place to work
  3. I rarely think about looking for a job at another company [true/false]
  4. I see myself still working at _________________in two years from now
  5. ______________motivates me to go beyond what I would in a similar role elsewhere

The next 12 questions are called L.E.A.D. questions (Leadership, Enablement, Alignment, Development) and provide a little more detail into the areas that affect employee engagement.

LEADERSHIP

  1. The leaders at _________________ keep people informed about what is happening
  2. My manager is a great role model for employees

ENABLEMENT

  1. I have access to the things I need to do my job well
  2. I have access to learning and development I need to do my job well

ALIGNMENT

  1. I know what I need to do to be successful in my role
  2. I receive appropriate recognition when I do good work

DEVELOPMENT

  1. My manager (or someone in management) has shown a genuine interest in my career aspirations
  2. I believe there are good career opportunities for me at this company

OPEN-ENDED QUESITONS

Significance

When surveying employees, it is important that the survey is designed and scored professionally. A quality survey firm builds and scores surveys based on the latest social science research. Anyone can assemble a quick survey using one of many tools available. What is lost however, is the ability to compare results against normative data and to perform statistical analysis.  Also, a quality firm has outstanding reporting and can provide insight into possible data mean and solutions to address issues. ABD SharedHR works with several vendors and regularly assists employers with engagement surveys as well as with helping to establish the follow up initiatives to address issues and build employee engagement.

Malcolm Whyte, SPHR – Vice President HR Services

Disclaimer: Some information contained herein has been abridged from numerous sources and may be protected by various copyright laws. Such information should not be construed as consulting or legal advice. Please contact our office for specific advice and/or referrals.

Bay Area Human Resources Services

Blog

SharedHR’s blog addresses important HR topics. We cover everything from compliance to workplace advice.

When is it Time to Leave a PEO?

Author: Saul Macias, MBA, PHR – Vice President of HR Services

When you were smaller, partnering with a professional employer organization (PEO) made sense. It shifted some tasks and liabilities off your shoulders and allowed you to afford to offer good health benefits to your employees. Most of all, outsourcing your human resources, benefits, and payroll gave you space to concentrate on growing your business.

Though co-employment had a role in the growth of your organization, many employers arrive at a point where it is appropriate to exit. Here are some key considerations as you decide whether to initiate that transition away from your PEO:

Benefits: Lots has changed in the world of benefits in the past couple of years. Offering benefits in-house would give you the autonomy to design, choose and manage your health and retirement benefits. The desire for greater flexibility in employee benefits can be a key driver to part ways from a PEO. (A lack of knowledge in this area, however, can often delay a PEO exit).

Service: As you grow, your business and your employees’ needs become more complex. In the midst of that complexity, you may find that your PEO lacks the expertise to drive and support your HR, benefits and payroll to meet your unique and evolving needs. Furthermore, a lack of onsite support or expertise to help you cover a multi-state or international expansion can be most challenging under a PEO model.

Cost /Scale: The average employer in a PEO has 15 employees. According to the Society of Human Resources Management (SHRM), the average HR professional supervises approximately 70 employees. Somewhere between 70 and 100 employees the economics may merit managing your benefits, payroll and HR in-house. But what will it take to build a team that can handle this role?

Co-employment: Under a PEO, one key area of managing your employees is done by a different company whose culture and identity could be very different from yours.

Once you have decided to exit, how do you make it happen?

PEO Transition:  Working with an experienced partner like ABD can help you analyze and manage the critical transition away from your PEO. Our team of multi-disciplined experts can help you plan, select the best technology platform, build the required work flows, and transition into your new program while keeping daily operations running smoothly. We can also help you hire an internal team or uncover new options that offer more flexibility than a PEO, but still allow you to outsource some or all of your human resources function. Contact us today to explore the possibilities.

Disclaimer: Some information contained herein has been abridged from numerous sources and may be protected by various copyright laws. Such information should not be construed as consulting or legal advice. Please contact our office for specific advice and/or referrals.

Bay Area Human Resources Services