Tech Giants Discover Equal Pay For Women

The San Diego Union-Tribune

Overall, the U.S. technology industry deserves its reputation for rapid innovation.

A big exception has been equal pay for women, where tech has looked more like the 1950s. In the male-dominated nerd culture that rules many software and silicon companies, talented women face the biggest pay disparity of all — close to zero jobs outside of the human resources or marketing departments, versus a universe of lucrative positions for men.

Yet if change is badly overdue, equal pay policies are suddenly spreading fast in tech.

Last week Qualcomm, the giant smartphone chip maker based in San Diego, agreed to pay $19.5 million to settle a gender discrimination complaint. Women engineers were frustrated by lower pay and obstacles to promotions.

Without admitting wrongdoing, Qualcomm agreed to change its policies and hire outside organizational psychologists to help ensure that reforms stick. The deal covers 3,300 women who work in science, technology, engineering and math jobs at the company’s U.S. operations.

We may not know for years whether this particular tech giant can transform its culture. In any case, Qualcomm is playing catch-up.

In February, rival Intel said it had reached 100 percent gender pay parity, one year into its $300 million program to reshape its workforce to achieve “full representation” of women and minorities, the Wall Street Journal reported.

A month later, Apple said women’s pay was 99.6 percent of men’s, with pay to minorities at 99.7 percent of parity. And in April, Facebook and Microsoft released data — under pressure from an activist shareholder — designed to prove they pay equal wages to men and women of equal worth.

Yet this wave had predecessors. Last year, Salesforce.com spent $3 million to give raises to women and a few men to reach parity across equivalent levels of performance and responsibilities.

Cisco Systems formed a unit in 2013 that continuously reviews its salaries to make sure women and men are paid fairly.
The trend is very tech-like: A company discovers something, which lingers for a few years until big competitors catch on, whereupon the general public starts to hear about an innovation that seems sudden.

In this case, the discovery owes more to public pressure than to any laboratory.

On Jan. 1, a California law took effect that expands the definition of equal pay for women. At first glance, the law seems primarily symbolic, even cynically political.

Gender-based pay discrimination has been illegal in California since 1949. President Kennedy outlawed the practice nationwide in 1963.

And yet a half-century later, such discrimination persists throughout major parts of the economy. Although academics can’t agree on how much less they receive overall, many women still face some degree of disparity in pay, regardless of experience and performance.

The new California law shifts the burden of proof from workers to employers and prohibits companies from paying unequally for “similar work” — potentially a legal leap beyond the “equal work” language in federal law. Courts will have to figure out the difference.

In addition, the state law’s “transparency” provisions prohibit firms from punishing workers who discuss their wages with colleagues. Violators face bills for back wages and interest, along with penalties.

Ensuring pay equality is much harder than it looks. Large firms famously have trouble measuring employee performance in the first place, let alone linking rewards across “similar” positions in separate departments.

California’s law allows a series of exemptions, including systems based on seniority, merit and quantity or quality of production. This flexibility is good in theory, but it also complicates matters further.

In classic fashion, large tech companies are treating the resulting management challenge much like an engineering problem.
Many find that their human resources software systems don’t produce the kinds of statistics they need to conduct robust pay audits.

The good news is that the improved standardization you need to pass an audit can, if designed deftly, yield a management system that workers see as much fairer. Just because that man was recruited two years ago from another firm no longer guarantees he will get a bigger paycheck than a woman who outperforms him today.

For now, such overhauls are mostly limited to large companies with resources to match their bureaucracies. Someday the resulting practices may trickle down to the small startups that produce the most jobs and innovation, and where conditions are often the most hostile to women.

One encouraging sign is this year’s outbreak of executive will.

For Qualcomm, which posted $5.2 billion in net income over the last 12 months, this $19.5 million settlement is little more than a rounding error on its financial statement. And the company is feared around the world for its ferocity in contesting patent, licensing and royalty lawsuits.

No, fear of litigation or losses didn’t drive this deal. It would seem that San Diego’s chip giant, like its competitors, has discovered that success in business amid brutal competition requires plenty of help from talented women.

This year’s great tech discovery, long overdue, may be that equal pay is good business.