We have previously noted that employers assessing pay equity issues must account for brand and morale dangers in addition to regulatory and litigation risks. Over the last few years, employers have seen pay equity issues impact investor relations, recruiting, and branding. Recent developments have further accentuated these risks and created even more pay equity concerns for employers.
Unions Join Pay Equity Fight
Employees decide to push for the formation and certification of a collective bargaining representative for many reasons. Historically, these reasons have included demands for increased compensation, reduced work hours, better protection against discipline, and workplace safety issues.
Recently, however, employers have begun to see unionization efforts based on issues around fair pay. These issues can manifest themselves in various ways (e.g., tip pooling in the hospitality industry or disputes between the compensation paid to particular employee groups), but one new issue is gender and racial pay equity. Employees are launching union campaigns based on demands that the employer addresses real (or perceived) gender or racial pay inequities.
Google’s experience illustrates how perceived pay inequities can be folded into an ongoing unionization effort. The Communication Workers of America (CWA) recently formed a minority union at Google and Alphabet (Google’s parent company) based, in part, on claims of pay inequity. The CWA had been pushing for unionization at Google for years but recently added pay inequity claims to its campaign. And the CWA has promised to launch additional campaigns—at Google and other employers—based on pay equity concerns.
Not Always Bad for the Brand
Employers continue to see advocacy groups attacking brands based on pay equity concerns, following in the footsteps of the National Women’s Soccer team and supporting advocacy groups.
On the bright side, some employers use their efforts to identify and remedy pay disparities as a proactive strategy to improve their brand position. Nike, for example, is affirmatively touting its efforts in the pay equity space.
It’s important that employers not only audit their compensation policies but also consider the full scope of their impact. Employers should go beyond accounting for regulatory challenges and litigation risk and address labor and brand issues in the pay equity area.