New “Fair Pay” Law for 2016 is “Fairly” Opaque

Since statistics tracked the difference in pay for men and women, women have been paid about 76 to 84 cents for every dollar earned by a man, holding constant factors such as education and skill. A federal law—the Equal Pay Act— was intended to address this but has been a bust because women in similar jobs to men cannot prove the disparity is due to gender differences. California will implement a new law in 2016 that aggressively tackles this problem. My take? The intentions are commendable, but no law can sort out the complex array of factors that affect pay. Research has shown, over and over, that men bargain more aggressively for starting pay and pay raises than women. Is that evidence of discrimination? No. The labor market consistently undervalues female dominated professions such as HR management, and pays more for accounting and financial management— male dominated fields. Controlling for education and managerial discretion, California employers might need to pay HR professionals (mostly women) more. My concern is that employers will actually go the other way, and pay men less. Is that progress? My ultimate worry is that this law will unleash a flood of “fair pay” lawsuits, leading some employers to classify workers as independent contractors, thereby avoiding this misguided employment law.