Transparency the Key to Achieving Gender Equality

Last March, the Senate of the Republic approved a new reform that forces companies to ensure that men and women receive equal compensation for jobs that have the same responsibilities.

It is said that in Mexico women earn up to 33 percent less than men doing the same jobs but we still pay the same taxes. This simply creates a disparity that makes women much more vulnerable. Now, it is in the law that this type of discrimination cannot exist.

Identifying the Practice

It may be difficult to accept that this type of discrimination exists in our companies, especially for early-stage startups, when it is quite hard to define salary ranges or bands because you are still not a recognized brand employer. You just go with the flow and negotiate salaries using an almost improvised strategy. This practice can result in discrimination. And discrimination is so integrated into the system that we often do not even realize that it is happening in our own home. It is better to act as soon as possible, not only because it is the right thing to do or to be on "the right side of history," as Hillary Clinton would say, but also because it may soon represent a high risk for your business.

This type of discrimination is not always as obvious as it seems. There is a lot of different data and particularities given the work history of an employee and over time this deepens the disparities. So, it is not only about opening and publishing the salary ranges by type of position, it must be continuously monitored by HR teams.

In the US, this has already happened, even at the largest companies. For example, a lawsuit resulted in Uber having to pay US$10 million for practices of wage discrimination against women and people of color. Given the lack of payroll transparency, the new generation of employees are taking matters into their own hands. According to an HBR article, “Google found this the hard way, when The New York Times published data from a clandestine spreadsheet in which more than 1,200 employees (2% of Google's workforce) shared their wages, revealing that the company paid men more than women at most job levels."

So, what path should we follow?

Equal-Pay Audit

In simple terms, an equal-pay audit involves comparing the salary of employees who perform similar jobs in an organization (taking into account reasonable differences, such as work experience, credentials and job performance) and investigating the causes of the salary differences that cannot be justified. These audits can be done internally when there are few employees but it is possible and even advisable to hire companies dedicated to this for companies with more than 50 employees.

Before beginning the audit, companies should ensure that auditors are working with an accurate set of employee data. It should have each employee's length of service, job classification and demographic information, including gender, race and age.

Formal Salary Policy

Once the audit is completed, a formal policy for hiring and pay raises must be generated. Currently, new article 34 Bis establishes that: “I. Institutions and public and private companies are obliged to pay equally for the provision of the same work, either directly or indirectly, and whatever the nature of the same, salary or extra salary, without any discrimination due to sex ratio in none of the items. II. The remuneration will be proportional to the responsibility.”

Employers with formal compensation policies benefit from internally equitable and externally competitive salary grades. Having this basis for determining starting salary and pay raises provides consistency and fewer opportunities for discrimination. Pay ranges make it clear to workers what their earning potential is. Internal checks and balances, such as requiring HR approval for salary increases administered by supervisors, help companies control pay equity in all positions and departments.

Monitoring

Even when starting salaries are fair, a pay gap can arise over time if one group of employees receives more opportunities for promotion than another. Employers improve career paths for all employees when they post available positions internally so employees can apply. Employees should discuss career goals with their employer and request feedback on the steps to take to prepare for a promotion.

These are just some of the options to avoid discrimination but there are many more. It is important to stay informed and make the required changes. This is a job that we must all do together for the betterment of Mexico and entrepreneurship.