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How a new gender pay parity rule could have a major impact in health care

The Obama administration doubled-down on a recent executive order that attempts to close the wage gap and it could impact on your job.

How a new gender pay parity rule could have a major impact in health care

Following up on his signing of the Lilly Ledbetter Fair Pay Act in 2009, President Barack Obama in January of 2016—seven years to the day of the original act’s signing—made a move to combat the gender pay gap. The pay parity rule will require companies with at least 100 employees to disclose how much people are paid alongside already required reports on gender, race and ethnicity. The action, a partnership between the Equal Employment Opportunity Commission and the U.S. Department of Labor, is slated to take effect Sept. 30, 2017.

Obama, in the announcement, acknowledged progress in the last two years in closing the divide, but also cited the fact that the median year-round wage for a woman working full-time is still 79% of a man’s median earnings. And according to the Institute for Women’s Policy Research, if the rate of change in the annual earnings difference between men and women continues at the pace it has since 1960, it will take until 2059 to achieve parity.

Obama’s new rules could prove particularly revealing in health care, which has a history of inequities. This is what you might expect:

You’ll likely see a big chasm—especially between physicians and nurses

The gender pay gap has historically been wide in health care. According to a Journal of American Medical Association Internal Medicine study from 2013, female physicians earned about $50,000 less than males each year. And while nursing is an occupation dominated by women, male nurses make an average of more than $5,000 more per year than women, according to a 2014 JAMA study.

If companies were mandated to open up their books, the spotlight would shine brightly on these two key titles of the industry, says Dennis Van Norman of Van Norman & Associates, an HR consulting firm in St. Paul, Minnesota.

”When I got in the business, there were formally structured differences in men’s and women’s pay,” he adds. “Men were orderlies and women were nursing aides, and they did essentially the same job for different pay levels.” Van Norman added the titles of “janitor” and “maid” as other examples of the field’s historically inequitable nature.

Today the roles are no longer titled differently, but the pay still likely hasn’t caught up.

Much of the gap will be “unexplained”

Access to higher education has helped women close the gap slightly, while experience, industry and union status account for some of the differences in pay, according to a report by Francine Blau and Lawrence Kahn in the Academy of Management Perspectives. But this report found that more than 40% of the differences are unexplained.

Some of that gap will likely be owed to conscious (or unconscious) gender-based discrimination, as well as women’s reluctance to negotiate a higher salary.

Collective bargaining agreements can help establish equity for equal positions, but even that might not be sufficient in health care. “Differences can vary based on hours worked, shift differentials, environment, education, experience, location and more,” says Katie Donovan, founder of Equal Pay Negotiations in Medford, Massachusetts. While those are legitimate business reasons, there are still unconscious biases in the hiring, promotion and review processes that affect compensation. Obama’s rules could help illuminate these issues.

“Studies show that a candidate with a woman's name and the same credentials as a male candidate is viewed as less than the man,” Donovan says. “Other studies show that employers lie to women more during negotiations, making it harder to earn the same as a man who negotiated his employment package.”

You will likely notice inequities at your job

If these rules apply to your employer, get ready to check the data when it comes out. Get ready to advocate for yourself if you find you’re on the wrong side of an inequitable situation, male or female. Just because there’s more transparency doesn’t mean the problem will be addressed automatically.

There may be a reason for the differential, such as a difference in experience, Donovan says. In that case, examine your career path and determine whether more training or education could help close the gap.

If there doesn’t seem to be a reason for the difference, female employees will need to be their own advocates, individually and collectively, Donovan says. Once armed with the facts, identify the value you bring to the organization and make a case for getting a raise.

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