More than 50 years after passage
of the Equal Pay Act, women in America still earn about 80 cents for every
dollar earned by a man. That adds up to a loss for the average female worker of
about $380,000 over a lifetime.
Recently, the U.S. Department of
Labor's Office of Federal Contract Compliance Programs (OFCCP) entered into an
agreement with AstraZeneca, a large international pharmaceuticals firm, for the
company to pay some of its female sales associates a total of $250,000." AstraZeneca had a contract valued at over $2 billion with the U.S. Department
of Veterans Affairs to provide drugs to hospitals around the country. That made
it subject to Executive Order 11246, which aims to ensure that employees of
U.S. contractors and subcontractors with federal contracts pay their employees
fairly without regard to sex, race, color, religion, and national origin.
After conducting a compliance
review, the OFCCP concluded that AstraZeneca violated Executive Order 11246 by
failing to ensure certain women employees were paid fairly. According to the
OFCCP lawsuit, an AstraZeneca Business Center had routinely paid some of its
female "primary care" and "specialty care" level III
pharmaceutical sales specialists an average of $1,700 less than men with the
same positions.
Because of the company's pay
secrecy policies, many of the women didn't know they were being paid less. In
addition to the financial settlement, AstraZeneca and OFCCP will review
records of the firm's female employees in 14 states. If they find additional
statistical evidence of wage discrimination, the company must remedy it.
Questions
AstraZeneca has brought you in as a compensation consultant. Here are the questions they would like you to answer for them:
11-19. Although the case with OFCCP is closed, we wonder if there are any less discriminatory explanations possible for why our women sales reps on average earned less than men. If so, what are they?
11-20. Our own company now uses a point method to evaluate jobs for pay purposes, and each resulting job class also has a rate range associated with it. Sales associates are now paid a salary that is not based on incentive pay. List three specific things we can do to ensure that a similar problem (inequitable pay based on gender) does not arise again, assuming they continue using the point plan.
11-21. What sort of compensation plan would you recommend for us, and why?
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