Law Puts More Women on Boards

Chart: when compared across identical or similar jobs, North Carolina women make 84 cents for every dollar earned by a man

Chart: when compared across identical or similar jobs, North Carolina women make 84 cents for every dollar earned by a man

Back in May I wrote about Senator Kamala Harris’ proposed “Equal Pay Certification” program, which, if adopted, would make it illegal for companies to pay their female employees less than males doing the same job. Said Harris, “Under our plan, for the first time in American history, companies will be held responsible for demonstrating they are not engaging in pay discrimination.”

Harris’ plan follows other attempts to legislate away pay disparities, such as the Equal Pay Act of 1963, a year when women were paid 59 cents for every dollar earned by a man. But JFK’s act fell short for a couple of reasons. For one thing, it initially only applied to women in blue collar jobs. For another, any woman with a claim had to file a sex discrimination complaint, and then argue her case before a supervisor who was almost always a male. In 1972, the EPA was finally amended to include women in white collar jobs, but the pay disparity levels only improved slightly, as was the case in 2009 when President Obama signed the Fair Pay Act into law.

So just how bad is the pay gap today? The American Association of University Women conducted a study in 2018, which concluded that white women are paid about 80 cents for every dollar paid to a man doing the same job. That number falls to 61 cents for black women, and 53 cents for Latina women. Here in North Carolina, women earn about 84 cents for every dollar paid to a man, but that’s only an improvement of one penny from four years ago. Even worse, the pay gap isn’t expected to close until the year 2060.

I believe that one reason the gender pay gap hasn’t improved is because most corporations are still run by men. In fact, according to a 2015 report by Thinkprogress.org, there are only 48 female CEOs heading up the top 1,000 companies. I can’t prove that closing the pay gap isn’t a priority for most male executives, but the lack of progress made over the past decade in that regard is a good indicator. That means the problem is coming from the top. The California legislature must agree with me because they recently passed the first-ever law that would require publicly held corporations to put women on their boards of directors.

The new law would require those companies to place at least one woman on their boards by the end of this year. Companies with at least five board members must have two women on the board by 2021, and boards of six or more members, must include at least three women by that same deadline. The penalties for non compliance will be severe. According to the Associated Press, companies who fail to “report their board compositions” to the state face a $100,000 fine, and if they fail to meet the deadlines for inclusion, they will pay $100,000 for the first violation and “$300,000 for subsequent violations.”

The bad news is that the California law is being challenged in court by two different organizations who claim that it violates provisions in both the state and federal constitutions. The good news is that California lawmakers are on the right side of the pay disparity issue, and judges will be hard pressed to rule against a substantive effort to reform a corporate culture that discriminates against the majority of its workforce. Beyond that, we here in North Carolina should push our own General Assembly to embrace and adopt California’s new law, because putting more women in the board room can lead to a change in corporate priorities, among them to close the pay gap now instead of waiting until 2060. I said it before, and I’ll say it again: Women shouldn’t have to wait forty more years for something they should have had in the first place.

 
 

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