A compensation equity expert dissects what it takes to close the pay gap at any organization

Lucy Brewster here, filling in for Sheryl today and tomorrow. It seems the more things change, the more they stay the same.

That may be a cliché, but it’s certainly true when it comes to the persistent pay gap. In 2002, American women earned roughly 80 cents for every dollar earned by a man, according to data from the Pew Research Center. In 2022, two decades later, that metric was 82 cents to a dollar. In 2022, Black women earned 70% as much as white men, and Hispanic women earned 65% as much. READ MORE

How Brands Are Closing the Equity Gap for NIL in College Sports

The gap between how male and female student athletes are paid for their name, image and likeness spans the length of just about every college football field in the United States, but brands are starting to bridge that divide.

According to Opendorse—which has helped nearly 90,000 student athletes broker so-called NIL deals with brands including Amazon, Meta and Pepsi since the Supreme Court opened the door for NIL in 2021—roughly 77% of all NIL compensation goes to male athletes. Sam Weber, head of Opendorse’s brand marketing and communications, noted that football alone accounts for 55% of all NIL compensation in 2023.  READ MORE

The Latest in Pay Transparency and Equal Pay Regulations

The history of regulations related to pay equity is nothing new. Equal pay regulations can be traced back to 1938, when the Fair Labor Standards Act (FLSA) was enacted. In 1945 Congress introduced the Women’s Equal Pay Act and, in 1963, the Equal Pay Act. There have been updates to these laws and new laws introduced along the way.

More recently, states and local municipalities began tackling the issue head-on through new legislation to push employers to provide equal pay for all workers. 42 states and many more local governments have passed or proposed new legislation focused on pay equity and transparency. READ MORE

Bosses who want their workers to be more productive are better off sharing their salary than forcing them back to office

Bosses worried about productivity are trying to get their workers back in the office. But they might be better off spilling how much they make instead.

When managers make their salary information public, it spurs employees to work harder, finds a new working paper for the National Bureau of Economic Research (NBER), written by Harvard Business School professor Zoë Cullen. She found that a sample of 2,060 workers at a large commercial bank worked harder after learning that their managers are better paid than they’d previously thought. READ MORE

Pay Versus Performance Disclosure – Findings from the Early S&P 500 Filers

When the SEC finalized its proposed rule for Pay Versus Performance (PvP) disclosure in August 2022, the preparation for the 2023 proxy season suddenly became a fire drill. Management teams and their advisors were trying to get their arms around a new definition of pay called “Compensation Actually Paid” and the necessary calculations for the new disclosure. In addition to the calculations, there were questions around what this new disclosure would look like based on the SEC’s rules and, being the first of its kind, what other companies were doing. Our report provides insights into how companies with early filing dates approached this first year of the PvP disclosure requirement. READ MORE

For An Empathetic People Strategy, Start With Compensation

Compensation is the single most important component of the employee-employer relationship, and as such, should be the bedrock of an organization’s people strategy. Despite its central importance, it is common for even well-intentioned companies to let building a robust compensation program take a backseat to other initiatives. Doing so is dangerous. It weakens a company’s ability to attract and retain talent, especially diverse talent, and it hurts employees and the people who depend on them. As we head into a year of looming economic uncertainty, HR leaders intent on building effective and inclusive people strategies should begin with compensation first. READ MORE

Apple lawsuit claims company fails to pay overtime compensation at correct rate

Apple violated the law by allegedly failing to include the value of vested restricted stock unit compensation in its non-exempt employees regular rates of pay to calculate overtime pay, a new class action lawsuit alleges. 

Plaintiff Francis Costa claims Apple has a policy of awarding restricted stock units to its non-exempt employees, but not incorporating them into their regular rate of pay when they calculate their overtime pay. READ MORE

Senators introduce bill to claw back executive compensation after SVB's and Signature Bank's collapses

A bipartisan group of senators introduced legislation to give regulators the authority to claw back executive compensation and bonuses from failed banks following the collapses of Silicon Valley Bank and Signature Bank this month.

Democrats Elizabeth Warren of Massachusetts and Catherine Cortez Masto of Nevada and Republicans Josh Hawley of Missouri and Mike Braun of Indiana are proposing a bill dubbed the Failed Bank Executives Clawback Act, which would mandate that federal regulators return to a bank all or part of the compensation its executives had received in the five years leading up to a bank’s failure. READ MORE

Lawmakers open to Biden’s call to claw back SVB executive pay

President Joe Biden’s call for legislation that would allow regulators to claw back executive bonuses and stock sale proceeds in the lead up to the Silicon Valley Bank collapse has found a receptive audience on Capitol Hill. 

Democrats and Republicans are unlikely to come together to tighten bank regulations following the collapse of SVB of Santa Clara, Calif., and Signature Bank of New York City, but members of both parties say they’re open to legislation that would punish executives for their role in the bank failures.  READ MORE

S Corps and Reasonable Compensation

For most of the country, the March 15th S Corp filing deadline has passed. However, for the storm-ravaged states of California, Alabama, and Georgia, the Internal Revenue Service (IRS) has extended the date to file various federal individual and business returns and make tax payments to October 16th, 2023. The October 16th deadline also applies to 2023 estimated tax payments, typically due on April 18th, June 15th, and September 15th. It also applies to the quarterly payroll and excise tax returns, usually due on January 31st, April 30th, and July 31st.

If you don’t live in one of those states and missed the deadline to claim the S Corp election, you can still file IRS Form 2553. However, your S Corp status will not begin until the following calendar year. READ MORE

Paid Time Off Remains Distinct from Salary, Court Says

Paid time off (PTO) is not considered part of an employee's salary, so it can be docked without jeopardizing the employee's exempt status, the 3rd U.S. Circuit Court of Appeals recently ruled. In a March 15 opinion, the court held that PTO is a fringe benefit with monetary value, not a component of salary under federal law.

"Even though the employer prevailed in this case, one key lesson is that employers must carefully analyze any plan that would result in taking money away from exempt employees to ensure that the exemption is not lost," said Steven Suflas, an attorney with Holland & Hart in Salt Lake City. READ MORE

15 states with the least salary transparency

Salary transparency laws are seen as a way to give job seekers the insight they need to make informed career decisions. While eight states already have laws in place and 15 states are considering it, do organizations really have employees' best interests in mind?  

Job search site Adzuna ranked which states boasted the most job postings with salary ranges of $50,000 or more, and found that five states with salary transparency laws made it to the top 15, namely California, Washington, Maryland, Colorado and New York. Granted, only New York City's salary transparency law is in full effect — the state-wide law doesn't go into effect until September 17.  READ MORE