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Pay
Equity Legislation Synopsis As members of BPW/USA, we know that women working full-time earn just 73 percent of what men earn working full-time, even after accounting for differences in education, age, location, and the number of hours worked. In Maryland, this wage gap cost working women’s families $4.4 billion each year (Institute for Women’s Policy Research, 2002). SMD BPW has proposed introducing a Fair Pay Act in Maryland to: • Effectively correct and deter discriminatory
wage practices based on sex, race, and/or national origin; • Obtain a legislative sponsor for pay equity. Two email lists are being launched this month. The first list is an action-oriented list to build and maintain a statewide grassroots support network to gain passage of pay equity legislation in Maryland. The address for this list is [email protected] (Pay Equity Action List). The second list will be used to increase awareness of pay equity issues and keep interested individuals and the media informed of the status of pay equity legislation in Maryland. The address for this list is [email protected]. All members that have indicated an interest in the Legislative or Pay Equity Committees will receive an invitation to join both lists. If you are interested in joining one or both of these lists, please send an email to Aileen Worrell. HB____SB____ An Amendment to the Equal Pay for Equal Work Act The purpose of this act is to: 1) effectively correct and deter discriminatory wage practices based on sex, race and/or national origin by increasing the penalties for discrimination; 2) develop reliable data about the extent of such wage discrimination; and 3) provide greater understanding about its causes. Senate
Sponsor: Senator Sharon Grosfeld Background In Maryland women working full-time earn just 76.6 percent of what men earn. In Maryland, this wage gap costs working women’s families $4.4 billion each year (Institute for Women’s Policy Research, 2002). Women of color in Maryland earn just 64 cents for every dollar earned by men. Men of color in the state earn 77 cents for every dollar white men earn. Raising the wages of women and minorities as much as comparable men would increase family incomes and reduce poverty. In Maryland, the earnings of single mothers would increase an average of $5,300 annually, reducing poverty rates for these families from 22 to 6 percent (Institute for Women’s Policy Research, 2002). Major Provisions of the Bill • Establishes a free-standing Commission to study the causes and effects of wage disparities based on gender, race, and national origin. The Commission membership would be drawn from academia, business, government agencies, legislators, and advocacy groups. The Commission would collect, analyze and report data on wage disparities and to make recommendations to the Governor and the General Assembly for achieving pay equity in Maryland. • Increases the penalties for employers who engage in discriminatory wage-setting practices by enabling plaintiffs to recover compensatory and punitive damages under the Maryland Equal Pay for Equal Work Act. What is pay equity? Pay equity is a means of eliminating wage discrimination in the workplace by establishing wage-setting criteria that is sex- and race-neutral. What is the legal status of pay equity in Maryland? The Equal Pay for Equal Work Act prohibits unequal pay to employees of the opposite sex if the employees “work in the same establishment and perform work of comparable character or work on the same operation, in the same business, or of the same type.” An employee may bring action against an employer who engages in discriminatory wage-setting practices to recover the “difference between the wages paid to male and female employees who do the same type work and an additional equal amount as liquidated damages.” Any action must be filed “within 3 years of the act on which the action is based.” Why is there a wage gap? The wage gap exists, in part, because many women and people of color are still segregated into a small number of jobs such as clerical, service workers, nurses and teachers. These jobs have historically been undervalued and continue to be underpaid to a large extent because of the gender and race of the people who hold them. Studies show that the more an occupation is dominated by women or people of color, the less it pays. Part of the wage gap results from differences in education, experience or time in the workforce. But a significant portion cannot be explained by any of those factors; it is attributable to discrimination. Hasn't the wage gap closed considerably in recent years? The wage gap has narrowed by about fourteen percentage points during the last 19 years, ranging from 62 percent in 1982 to 76 percent in 2002. Since 1973, approximately 60 percent of the change in the wage gap is due to the fall in men's real earnings. About 40 percent of the change in the wage gap is due to the increase in women's wages. How is Maryland doing in comparison the the other states? In a recent report by the Institute for Women’s Policy Research (The Status of Women in the States, 2002-03) Maryland ranked second in the U.S. on the employment and earnings composite index reflecting women’s relatively good status as compared with women in other states. Median annual earnings for women working full-time, year round in Maryland were $31,680 with 41 percent of employed women in managerial and professional jobs (ranking second in the U.S. on both indicators). The rankings, however, do indicate that women in Maryland continue to lag behind men in terms of wages and labor force participation with women in Maryland working full-time, year round earning 76.6 percent of what men earn (ranking ninth in the U.S.) and 64.3 percent of the women in Maryland employed in the labor force (ranking fourteenth in the U.S.). In Maryland, pay inequity continues to cost workingwomen’s families over $4.4 billion dollars each year. What are other states doing about pay equity? More than half of the states are expected to introduce equal pay legislation. State equal pay bills can generally be grouped into three categories: 1) bills that prohibit wage discrimination on the basis of sex, race, and national origin; 2) bills that enhance current legislation to allow employees to sue for punitive and compensatory damages; and 3) bills that establish a commission to study the wage gap and recommend solutions. Since the 1980s, twenty states have made some adjustments of payrolls to correct for sex or race bias. Seven of these states successfully completed full implementation of a pay equity plan. Twenty-four states including Washington, DC conducted studies to determine if sex was a wage determinant. Four states examined their compensation systems to correct race bias, as well. Wouldn't pay equity cost the state too much? In Minnesota, where pay equity legislation meant raises for 30,000 state employees, the cost was only 3.7 percent of the state’s payroll budget over a four-year period--less than one percent of the budget each year. In Washington State, pay equity was achieved at a cost of 2.6 percent of the state’s personnel costs and was implemented over an eight-year period.
AFL-CIO Working Women’s Department, “Equal Pay in Maryland Fact Sheet,” 2002. AFL-CIO Working Women’s Department, “Equal Pay Day 2002, Legislative Background.” Business and Professional Women/USA, www.bpwusa.org. Institute for Women’s Policy Research, The Status of Women in the States, Fourth Edition, 2002-03. National
Committee on Pay Equity, “Questions and Answers on Pay Equity,”
www.feminist.com/fairpay/faqape.htm, 2002.
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