State Senate bill aims to close gender wage gap

Hawaii needs to do more to eliminate the wage gap between men and women on average, according to supporters of a bill aimed at strengthening state law against gender-based pay discrimination.

The bill, discussed at a Senate Judiciary and Labor Committee hearing last week, said Hawaii has been better at reducing the gap compared with the rest of the nation but that the pace of improvement since 1960 suggests that pay parity won’t be reached until 2058.

“Women in Hawaii who are employed full time lose out on more than $1.4 billion annually because of the wage gap,” Catherine Betts, executive director of the Hawaii State Commission on the Status of Women, told the committee chaired by Sen. Gilbert Keith-Agaran. “This has real tangible and substantial effects on women and families.”

Authors of the bill cite a higher figure than what Betts mentioned for how much less women in Hawaii earn annually on the job — $1.7 billion — and added that the gap contributes to a higher poverty rate for women (12 percent) than men (7 percent).

The proposed legislation, Senate Bill 2313, said women in Hawaii earned 86 cents for every dollar that men earned on average for full-time, year-round work in 2014, which is better than the national average where pay for women equated to 79 cents to the dollar for men.

The U.S. Department of Labor provided new statistics last week that said women earned a bit more on the dollar relative to men in 2014 — 93 cents in Hawaii and 83 cents nationally.

The agency also said Hawaii had the closest gap of any state but said earnings comparisons by gender are on a broad level and don’t control for factors that can significantly influence earnings differences, such as job skills, responsibilities, work experience and specialization.

Still, employees in Hawaii need more protection under state law to erase the disparity, according to SB 2313.

“Action should be taken to encourage greater gender equality in the workplace,” the bill states.

SB 2313 proposes to reduce the number of legally permissible reasons that allow an employer to pay a woman less than a man for the same work.

Hawaii’s existing equal-pay law allows employers to pay someone of the opposite sex less for work that requires equal skill, effort and responsibility under similar conditions only if the pay is governed by a seniority system, a merit system, a bona fide occupational qualification or the quantity or quality of production. The law also allows a pay disparity for equal work if it is based on “any other permissible factor other than sex.”

Proposed amendments to the law offered in the bill would eliminate the last broad category along with pay specifically based on production quantity or quality. Also, extra qualifications would be added to the other exemptions.

For example, a merit system, which perhaps could cover work quality, must be applied consistently and without discrimination. An occupational qualification, under the bill, must be necessary for a position and have no disparate impact based on sex. And for a seniority system to be a valid exemption, it must be established by a collective bargaining agreement, civil service requirement or formal employer policy.

The bill also would eliminate a requirement under existing law that allows wage comparisons only for employees in the same physical location. The bill also forbids employers from discouraging or prohibiting employees from inquiring about or disclosing the pay of co-workers.

One other proposed tweak to the law would change the phrase “equal work” to “substantially similar work.”

Federal wage discrimination law considers “equal” to mean substantially equal and offers additional protections including prohibiting employers from lowering wages to equalize pay. Federal law also counts other compensation benefits such as bonuses, a company car, expense account and insurance as part of wages.

Initial public testimony on SB 2313 mostly endorsed the bill. Advocates included the Hawaii Civil Rights Commission, which enforces state employment discrimination laws, the Women’s Caucus of the Democratic Party of Hawaii, Planned Parenthood and several individuals.

The only opposition came from Mary Smart of Mililani and the National Federation of Independent Business.

Smart and the NFIB argue that Hawaii’s equal-pay law provides adequate protection for women and that changing the law as proposed will invite more frivolous litigation efforts against employers.

Melissa Pavlicek, the NFIB’s local representative, said the pay gap cited in the bill is misleading because factors other than discrimination contribute to differences in average pay.

She cited a 2009 report prepared for the U.S. Department of Labor that said average pay differences by gender are influenced by women trading pay for better family-friendly employment benefits, women who leave the workforce for childbirth or to care for children or elderly relatives, and other nondiscriminatory factors.

“We believe (state and federal) laws already cover the issue of gender wage discrimination, and have not seen any credible evidence that these laws are not sufficient to prevent wage discrimination outside of misleading statistics,” Pavlicek said in written testimony.

The Senate committee asked for more information from NFIB including language from equal-pay laws in other states that the business organization embraces. A decision on whether to advance the bill is expected to be made Feb. 16.

A similar bill introduced in the House, HB 1909, has not been scheduled for a hearing yet.