If Title VII of the Civil Rights Act of 1964 prohibits gender discrimination in the workplace, Iceland has now officially gone a step above and beyond: on January 1, 2018, it enacted a law that requires companies with 25 or more employees to pay men and women equally. The risk of non-compliance? A $500\/day fine. The hurdle? Seeking equal pay certification from the government.<\/p>\n
Many women\u2019s rights activists have been celebrating this milestone, but when we asked U.S.-based CEOs how confident they felt that a similar law in the United States would help eradicate the gender wage gap, most said it was unrealistic at best, rating its likelihood of success 4.49 out of 10.<\/p>\n
The Case for Meritocracy<\/strong> The main pushback, CEOs told us, is expecting companies to pay everyone the same salary if they are doing the same job. \u201cPay should not be the same for doing the same job,\u201d commented the CEO of a mid-sized tech company who, nevertheless, believes the likelihood of success of a similar law in the U.S. is good. \u201cPay should be the same if the results are the same and the experience is the same\u2026Those that deliver the results are more valuable employees and should be paid more.\u201d<\/p>\n The concept of equal pay for equal results, rather than equal responsibilities, was not foreign to the Icelandic government when it drafted the law. Even under the new law, the country\u2019s employers maintain the right to base pay on experience, education, technical skills, performance, or any other factor deemed appropriate. They are, however, obliged to demonstrate the fairness and non-discriminatory nature of their decisions. After all, paying everyone the same isn\u2019t fair to anyone either, and companies risk losing their top performers if results aren\u2019t rewarded.<\/p>\n \u201cthe great majority of those who responded to our survey are against such measures, mainly because they are a logistical nightmare and that markets\u2014not government\u2014should dictate compensation.\u201d<\/p><\/blockquote>\n So, what the law has done, in reality, is force employers to be proactive by proving their pay structure is not discriminating based on gender. While one CEO remarked that if mandatory audits have made their way into legislation, it is \u201cbecause business won’t do what they should until forced [and fined],\u201d the great majority of those who responded to our survey are against such measures, mainly because they are a logistical nightmare and that markets\u2014not government\u2014should dictate compensation.<\/p>\n \u201cIt’s extremely difficult to compare candidates and pay structures even among the same gender,\u201d explained the CEO at another mid-sized tech company. \u201cEnforcement of such a law appears difficult to impossible.\u201d<\/p>\n The Work-Arounds<\/strong> Some CEOs also hinted at more unscrupulous work-arounds, like the idea that Iceland’s rule may result in numerous new creative job titles for similar work or pay packages with varying perks and benefits. Discrimination in hiring practices may also ensue, which in turn could backfire as companies battle lawsuits and grow apprehensive of hiring women.<\/p>\n \u201cGovernment meddling will not eradicate the issue,\u201d concluded the owner of a small professional services firm who rated a gender pay equality law in the U.S. as not at all likely to yield positive results. \u201cTransparency of wages will. That effort is well on its way to standard best practice. When presented with sound reasoning and a solid structure for calculating wages, employees accept there will be differences.\u201d<\/p>\n The Stigma<\/strong> \u201cIn general, pay gap is not dependent on gender but on qualifications and level of commitment,\u201d echoed the chair of a small industrial manufacturing firm. \u201c[Wage equality] already is close because of additional time and consideration for women’s needs.\u201d<\/p>\n \u201cI believe most of the wage gap is due to women taking off work and focusing on family,\u201d added the chairman of a mid-sized wholesale company.<\/p>\n Gender aside, should an employee\u2019s salary be reflective of their level of commitment to advancing their career? Is parental leave or work-life balance perceived as a lack of commitment?<\/p>\n Not so fast, says a female CEO in the male-dominant field of high technology. \u201cThere are many factors for the wage gap. Women are still playing catch up in many areas, including but not limited to education, lack of professionalism, not taking risks, etc. Plus, there remains an overall bias against women in the workplace.\u201d<\/p>\n The Real Story<\/strong> \u201cWomen now have equal opportunity and in fact are now becoming even better educated than men. They are moving into the lower rungs of leadership positions, but it will still take some time for large numbers of them to get the experience that will qualify them for the top tier and achieve equal outcome.\u201d<\/p>\n In the end, as the president of a mid-sized retail organization put it: \u201cYou can’t legislate fairness and ethical behavior, nor can it be enforced.\u201d Eradicating the gender wage gap first requires consensus on its existence. Only then can we begin talking about compensation practices.<\/p>\n This data is from Chief Executive Group’s January 2018 CEO Confidence Index survey.\u00a0<\/em><\/p>\n","protected":false},"excerpt":{"rendered":" U.S.-based CEOs feel that a law similar to Iceland’s in the United States, to eradicate the gender wage gap, would be unrealistic at best, rating its likelihood of success 4.49 out of 10.<\/p>\n","protected":false},"author":3435,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_oasis_is_in_workflow":0,"_oasis_original":0,"_relevanssi_hide_post":"","_relevanssi_hide_content":"","_relevanssi_pin_for_all":"","_relevanssi_pin_keywords":"","_relevanssi_unpin_keywords":"","_relevanssi_related_keywords":"","_relevanssi_related_include_ids":"","_relevanssi_related_exclude_ids":"","_relevanssi_related_no_append":"","_relevanssi_related_not_related":"","_relevanssi_related_posts":"","_relevanssi_noindex_reason":"","footnotes":"","_links_to":"","_links_to_target":""},"categories":[2199,2130],"tags":[42909],"class_list":["post-63585","post","type-post","status-publish","format-standard","hentry","category-compensation","category-talentmanagement","tag-research"],"acf":[],"yoast_head":"\n
\n\u201cThis is insanity,\u201d commented one of the chief executives in our survey.<\/p>\n
\nIf defining \u201csimilar jobs\u201d or finding comparables is one of the most apparent challenges of Iceland\u2019s law, we can\u2019t forget the possibility of loopholes, as in any regulation. And in a climate where leaders and business owners are pushing for less regulation, adding new laws would be perceived by many as another obstacle to growing a profitable company or, at the very least, a step back to the current deregulation trend.<\/p>\n
\nBut what happens when those differences in wages are based on a worker\u2019s ambitions? \u201cThe wage gap is really a life choice gap,\u201d wrote the chairman and CEO of an upper middle-sized wholesale corporation.<\/p>\n
\nSo, is there a solution? Some say no, because there is no real problem. Studies have shown the gender pay gap isn\u2019t in respect to pay within a given role, but rather based on the fact that there are fewer women being considered\u2014and pursuing\u2014higher-paying positions.<\/p>\n