Confronting Systemic Pay Bias in the Legal Community with New Legislation

As new legislation is implemented in workplaces throughout California, the legal community, which enforces justice, has a unique opportunity to be a positive role model in confronting systemic bias with the implementation of new pay data disclosures and reporting requirements found in Cal. Labor Code § 432.3 and Cal. Government Code §12999. See New Equity Labor and Employment Laws, by Audrey Gee, David Marchiano and Marissa Boyd.

Driven in part by national social movements including #MeToo and #BlackLivesMatter, pay equity has been a part of significant advocacy to address systemic bias. Despite efforts by movement advocates, systemic disparities remain, including pay disparities within the very workspaces which are entrusted to enforce them, the legal community.

Differences based on sex and race/ethnicity is outlawed by state and federal law. Recent additional California initiatives have been sought to reduce the pay gap by increasing transparency around employee pay along with other proactive measures. In September 2020, California passed SB 973[1] which required employers with 100 or more employees to provide (former) Department of Fair Employment and Housing (DFEH) now California Civil Rights Department (CRD) EEO-1 pay data reporting. In 2021, employers submitted their first pay equity data reports; in March 15, 2022, the CRD published its inaugural report on the overall results. The CRD summary report concluded that among workers in the highest pay bands (earning $128,960 or more in 2020), women were underrepresented at 36%[2] of workers. Further, the data showed an annual gender pay gap in 2020 of $46 billion[3] and an even higher race/ethnicity annual gender pay gap of $61 billion. In a continued effort to remedy these systemic pay disparities, SB 1162, effective January 1, 2023, expanded upon SB 973’s efforts through extended reporting, pay scale disclosures, and record retention.

As of end of January 2023, the California State Bar had just over 196,000 active members. Women, who are currently over half of California’s adult population, are just 44% of California’s attorneys.[4] The California State Bar 2022 data confirms this gender gap exists for women within the legal profession from the inception of their career and continues to widen.

In 2022, women earned only $0.82 for every dollar a man made[5], according to the Gender Pay Gap Report, (hereinafter “PayScale Report”). This gender pay gap is more significant for women of color. For example, Black women typically make just $0.67 for every dollar paid to white, non-Hispanic men[6]. The gender pay gap is wider for several cities close to our county, including an uncontrolled wage gap[7] in San Francisco/Oakland/Fremont at $0.82 and San Jose/Sunnyvale/Santa Clara at $0.81. Further, a predominant gender norm impacting the pay gap is the “motherhood penalty” or “childbearing penalty.” These are beliefs that women are meant to or will eventually become mothers and homemakers, which can also result in assumptions about their proficiency, productivity levels, or commitment to their careers. When women return to the workforce after having children, they incur a wage penalty. When women indicated they were a parent or primary caregiver, it resulted in an uncontrolled pay gap of $0.74 for every dollar earned by a male parent.[8]

The gender wage gap during an individual’s career follows them into retirement. For women who earned $0.83 for every dollar earned by a male, she suffers a yearly gap of $10,435. By the end of her career, a full-time working woman would have lost $417,400 of income. The lifetime loss for women of color is more dramatic, $976,800 for Black women and $1.2 million for Hispanic women. These yearly and lifetime losses further negatively impact the ability for women to save for retirement contributing to the wealth gap.

The pay gap also expands as women progress in their education. Women with law degrees earn $0.89 for every dollar earned by men with a law degree.[9] Women hold the majority of legal occupations at 52% women and 48% men. However, legal had the largest uncontrolled gender wage gap in the study at $0.63.

The gender pay gap in the legal field is prevalent from the inception of legal practice both in law firms as well as in-house. A 10-year study issued in September 2020, showed that by 2018 the pay gap had widened from 24% to 35% between male and female partner income. Male partners’ average compensation increased 42% over the past decade while female partners increased only 22%.[10] In a 2019 tracking of median salaries, women in general counsel positions made roughly $100,000 a year less than men. The larger the company, the larger the gap between male and female in-house counsel. A female in-house counsel at a public company with over $10 billion in revenue made nearly 34% less than her male peer in the same role.[11] Highlighting the “motherhood penalty,” in January 2023, a publicly disclosed text by a senior male attorney at an employment defense firm was sent to a female attorney who advised she was departing the firm following her maternity leave. This text read in part,

“…What you did – collecting salary from the firm while sitting on your ass, except to find time to interview for another job–says everything one needs to know about your character. Karma’s a bitch. Rest assured regarding anyone who inquires, they will hear the truth from me about what a soul-less and morally bankrupt person you are.”[12]

Further, female in-house counsel explained during a Spring 2018 legal conference that her salary had never caught up from maternity leave taken years ago because her prorated bonus that year became the baseline from which subsequent bonuses were based. As future bonuses were based upon a percentage increase from year to year, it became impossible for her to catch up with her peers.[13] These recent events have caused a decent amount of discussion, including the reality that the gender pay gap – as well as the “motherhood penalty” – impacts salary, bonus, other benefits of employment, potential promotions, and much more, thus highlighting the need for the present pay data legislation.

Even before SB 1162 became effective, a number of private employers including California-based giants Airbnb, Apple, Cisco, Door Dash, Dropbox, Google, Headspace Health, LinkedIn, Netflix, Nextdoor, Salesforce, Snap Inc., Twitter, and Uber, pledged to publish aspects of their workplace demographic data publicly in order to demonstrate commitment to eliminating disparities.[14] In supporting these new transparencies, California Labor Federation explained, “…good employers are already doing it. SB 1162 simply codifies existing best practices to ensure a fair and equal playing field for all workers.”[15]

When looking at the pay gap statistics for female attorneys as fractions of a dollar, it can be difficult to understand the impact on earnings over a lifetime, thus difficult to understand the importance of the present new legislation and the importance of implementation. However, these long-term significant pay gaps are not only detrimental to women and workers of color, but also harm the families they support and the state’s overall economy, resulting in a harmful “wealth gap.”[16]

There is a good deal of available data to guide employers, small and large, as well as law firms, to ensure compliance with the new disclosures, including:

• California Department of Industrial Relations, California Equal Pay Act, Frequently Asked Questions. https://www.dir.ca.gov/dlse/california_equal_pay_act.htm
• California Commission on the Status of Women and Girls, Equal Pay https://women.ca.gov/equalpayca/
• California Civil Rights Department, Pay Data Reporting https://calcivilrights.ca.gov/paydatareporting/

The legal community can be a positive role model for implementation of the new pay reporting requirements within our communities as we work together to break the cyclical wage and wealth disparities have held on women and people of color.

[1] SB 973, Jackson, Chapter 363, Statutes of 2020 https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201920200SB973
[2] California Pay Data Reports Show Women, Latinos, and Other Groups Overrepresented Among Low-Wage Workers Department of Fair Employment and Housing, March 15, 2022 https://calcivilrights.ca.gov/wp-content/uploads/sites/32/2022/03/DFEH-Pay-Data-Results-Press-Release-2022-03-15-1.pdf
[3] Trussaic, October 13, 2021 https://trusaic.com/press-center/statewide-gender-and-race-ethnicity-pay-gaps-in-california-exceed-46-billion-2/
[4] See Diversity 2022 California Licensed Attorneys, The State Bar of California (“State Bar”.) https://publications.calbar.ca.gov/2022-diversity-report-card/diversity-2022-california-licensed-attorneys
[5] Gender Pay Gap Report, PayScale, March 2022 https://www.payscale.com/compensation-trends/the-gender-pay-gap-is-real-and-employers-have-the-power-to-do-something-about-it/
[6] U.S. Census Bureau, Current Population Survey, 2022 Annual Social and Economic Supplement, Table PINC-05, CPS, 2022 ASEC https://www.census.gov/data/datasets/time-series/demo/cps/cps-asec.html
[7] The “uncontrolled” pay gap compares the average pay of all women and all men in the workforce. This gap is called the “uncontrolled” gap because it doesn’t control for any factors that might affect pay except sex. The “controlled” pay gap accounts for variations including occupations, education, race, etc.
[8] Gender Pay Gap Report, PayScale, March 2022 https://www.payscale.com/compensation-trends/the-gender-pay-gap-is-real-and-employers-have-the-power-to-do-something-about-it/
[9] The Gender Wage Gap Could Cost Women Millions When They Retire, CNBC, March 30, 2022 Gender wage gap could cost women millions in retirement savings (cnbc.com)
[10] ibid
[11] ibid
[12] Major, Lindsey & Africa’s Partner Compensation Surveys: A Decade of Perspective, Partners, Major, Lindsey & Africa, September 2020 https://www.mlaglobal.com/en/insights/research/2020-partner-compensation-report
[13] Gender Pay Gap Wide Atop In-House Counsel Ladder, May Be Closing, Bloomberg Law, June 29, 2020 https://news.bloomberglaw.com/esg/gender-pay-gap-wide-atop-in-house-counsel-ladder-may-be-closing
[14] ‘Collecting Salary From the Firm While Siting On Your Ass’ Is Certainly ONE Way For A Senior Lawyer To Describe Maternity Leave, Above the Law, January 9, 2023. https://abovethelaw.com/2023/01/collecting-salary-from-the-firm-while-sitting-on-your-ass-is-certainly-one-way-for-a-partner-to-describe-maternity-leave/
[15] The Motherhood Penalty – Alive and “Well” or on Its Way Out? American Bar Association, by Alise Henry, Esq., June 29, 2018 https://www.americanbar.org/groups/litigation/committees/woman-advocate/practice/2018/motherhood-penalty/
[16] Share DEI Data, Metrics, and Goals. The ACT Report, as of April 16, 2022 https://actreport.com/recommendations/#share
[17] Senate Judiciary Committee, 2021-2022, SB 1162, (Limón) at page 16, April 25, 2022 Bill Analysis – SB-1162 Employment: Salaries and Wages. (ca.gov)
[18] “The pay gap also contributes to the wealth gap. It makes it difficult for women to amass savings, build wealth and achieve economic security. Overall, the average American woman has a net worth of $5,541, less than half of the $12,188 average net worth of a man. In terms of overall wealth, a single woman has only 32 cents for each dollar a single man has. And the wealth gap is even wider for women of color, who have just pennies for every dollar a white male has. The Gender Pay Gap, AAUW, https://www.aauw.org/issues/equity/pay-gap/