compensation consultants

Pay Equity Challenges: The Importance of Individual Employee Data in Professional Occupations

In the recent ABA Journal article, “Why Are Women Leaving, Big Law Looks for an Answer and Finds Big Disparities,” authors Stephanie Scharf and Roberta Liebenberg advise law firms to “develop strategies and set targets for what they want to achieve. They should take a hard look at gender statistics in their firm and track them over time.”

In today’s workplaces, and especially within law firms, it is imperative to understand what factors, statistically, have led to current gender differences in pay and promotions, and to address differences that cannot be justified. At the present time, we are observing a substantial increase in demand for labor economists, including our own compensation consultants at Welch Consulting, to provide proactive studies of pay differences in law firms, typically with outside counsel protecting confidentiality.

Note that Scharf and Liebenberg are not simply advocating for addressing current differences in gender outcomes; they are also arguing that the human resource function must plan on re-analyzing data going forward as a regular part of annual compensation and promotion reviews.

Understanding Differences in Individual Compensation

compensation consultantsOne of the most challenging aspects of analyzing gender compensation outcomes for highly skilled employees—who often contribute significantly to generating or maintaining their own, and their firm's, business—is locating documentation as to what actions individuals have taken in their careers and what business consequences have arisen from individual initiatives, including business outreach efforts. If law firms are to meet the authors’ challenge of understanding and explaining differences in gender compensation among attorneys, a greater emphasis will be required on collecting and memorializing individual-specific data—including information on why some new attorneys at the firm are paid above-average salaries (regardless of gender) at hire, what empirical data justifies bonuses being set as high (or low) as they are, how non-revenue-generating activities are valued, etc. Further, these efforts must be on-going, beginning with documenting individual-specific drivers of compensation at hire for future employees and regularly reviewing, and updating, current employee data files for completeness.

As a general proposition, by implementing forward-looking procedures that explicitly document the factors that lead to individual compensation differences, human resources professionals will be able to construct a database that can be used to provide transparency in compensation decisions (and, indirectly, in hiring and promotional questions) arising among all employees.

Perhaps as importantly: emphasizing the gathering and recording of individual-level factors will allow employers, if challenged in the future, to benefit from their enhanced ability to defend statistically against discriminatory claims brought by groups of employees - claims featuring now-documented abilities of, and historical influences on, individual employees that can be shown to differ within the group.

Experienced Labor Economists

Many Welch Consulting clients consult on a regular basis with our labor economists to address employment issues brought to light under federal and state regulations. We regularly assist a multitude of law firms and other large organizations with matters relating to labor economics and statistics, and our expertise is applied to almost every industry in the country.

Interested in learning more about the industry leader in economic research and analysis? Contact us using our online form or by calling our offices in Los Angeles, Washington, D.C., or Bryan, Texas.


Amy Aukstikalnis to sponsor and attend the OCBA Labor & Employment Holiday Mixer on December 19th.

Please join Welch Consulting Principal,  Amy Aukstikalnis as she represents Welch Consulting as a sponsor of the Orange County Bar Association, Labor and Employment Section, Holiday Mixer on Thursday, December 19, 2019.  The mixer will be held from 5:30-7:30 PM at the TAPS Brewery & Barrel Room in Tustin, CA. There will be refreshments, door prizes and more.

Please CLICK HERE to Register as space is limited.


Welch Consulting Employment Index Eases off in November

The Welch Consulting Employment Index pulled back from recent highs in November, falling 0.1 points to 103.1. The index sits just off the highest values reached in 12 years.

The Welch Index measures full-time equivalent employment after adjustment for population growth and the aging of the workforce. An Index value of 100.0 indicates that adjusted full-time equivalent employment is the same as its level in the base year of 2004.

Over the past 12 months the Index has risen from 102.1 to 103.1. The increase in the Index over the past year means that full-time equivalent employment has been growing at a faster rate than the adult population.  Full-time equivalent employment increased 1.0% faster than the adult population over the past year (after making adjustments for the aging of the U.S. adult population). Looking back at the most recent 6 months, the Index rose from 102.2 in May to 103.1 currently. The growth rate in the most recent 6 months is stronger than the growth rate of the preceding 6 months. The rate of change over the past year is in line with the trend for the last 3 years of an increase of about 1.1% per year.

In September the index for women fell, while the index for men rose. The index for women was dipped from 106.9 to 106.7. The index for women is up from 105.1 a year ago. The index for men rose 0.1 points to 100.3, a new recent high. The index for men is up 0.7 points from its year ago value of 99.6. Over the last three years the index for women is up 4.9 points while the index for men is up 2.4 points.

 

Technical Note: Full-time equivalent employment equals full-time employment plus one half of part-time employment from the BLS household survey (the Current Population Survey). The data reported for a given month is generally from the calendar week that contains the 12th day of the month. The Welch index adjusts for the changing age distribution of the population by fixing the age distribution of adults to the distribution in the base year of 2004. Seasonal effects for the share of workers employed in part-time jobs are removed in a regression framework using monthly indicator variables.


On November 20th, Joshua Mitchell will testify at a public hearing before the the Equal Employment Opportunity Commission

Joshua Mitchell, Senior Economist at Welch Consulting and recent speaker at the annual American Bar Association Labor & Employment Conference, will testify at a public hearing before the Equal Employment Opportunity Commission on November 20th, 2019 in Washington, D.C.  Stemming from an article he recently wrote on the subject, he will be discussing the future of EEO-1 Component 2 pay reporting.

For more information, click here: https://www.eeoc.gov/eeoc/newsroom/release/11-13-19.cfm


Welch Consulting Employment Index Rises to New High in October

Welch Consulting Employment Index Rises to New High in October.

The Welch Consulting Employment Index rose again in October, reaching 103.2. This is its highest level in over 12 years.

The Welch Index measures full-time equivalent employment after adjustment for population growth and the aging of the workforce. An Index value of 100.0 indicates that adjusted full-time equivalent employment is the same as its level in the base year of 2004.

Over the past 12 months the Index has risen from 102.1 to 103.2. The increase in the Index over the past year means that full-time equivalent employment has been growing at a faster rate than the adult population.  Full-time equivalent employment increased 1.1% faster than the adult population over the past year (after making adjustments for the aging of the U.S. adult population). Looking back at the most recent 6 months, the Index rose from 102.1 in April to 103.1 currently. The growth rate in the most recent 6 months is stronger than the growth rate of the preceding 6 months. The rate of change over the past year is in line with the trend for the last 3 years of an increase of about 1.1% per year.

In September the index for women rose, as did the index for men. The index for women was stronger, rising from 106.5 to 106.9. For the second month in a row it set a new all-time high. The index for women is up from 105.3 a year ago. The index for men rose 0.1 points to 100.2, the same level as the recent high set in July. The index for men is up 0.9 points from its year ago value of 99.3. Over the last three years the index for women is up 4.9 points while the index for men is up 2.4 points.

Technical Note: Full-time equivalent employment equals full-time employment plus one half of part-time employment from the BLS household survey (the Current Population Survey). The data reported for a given month is generally from the calendar week that contains the 12th day of the month. The Welch index adjusts for the changing age distribution of the population by fixing the age distribution of adults to the distribution in the base year of 2004. Seasonal effects for the share of workers employed in part-time jobs are removed in a regression framework using monthly indicator variables.


Valentin Estevez Will Speak at the ABA Labor and Employment Law Conference in New Orleans On Nov. 8

On November 8, Valentin Estevez, Ph.D., Managing Director in our Texas and DC offices, will participate in a panel about the application of data analysis and statistics during class discovery in wage-and-hour litigation at the ABA's Labor and Employment Law Conference in New Orleans. He will be joined by a noted panel at 4 PM.

Dr. Estevez will speak on the topic, “Class Discovery in Wage and Hour Litigation”. Discovery in class and collective actions can be daunting, and the rules and requirements are constantly evolving. Learn from experienced panelists about issues that arise in conducting discovery in wage and hour actions, and hear about best practices and strategies for implementing an effective discovery plan. Representative discovery, depositions, ESI and common discovery disputes will be addressed.


Welch's Josh Mitchell at the ABA Labor and Employment Conference in New Orleans on Nov. 7

Josh Mitchell, Senior Economist at Welch Consulting, will be a panelist at the ABA on November 7, discussing the topic, “The EEOC’s Pay Reporting Requirement: Will It Persist and Impact the Pay Gap?”

Earlier this spring, the U.S. District Court for the District of Columbia ordered the EEOC to reinstate a pay data requirement. The EEOC has since announced covered U.S. employers must submit pay data for calendar years 2017 and 2018 by September 30, 2019. The new reporting requirement and state equal pay and pay transparency laws continue to create new legal obligations but also increase pressure for a greater understanding of pay equity issues, including how to address or explain pay gaps. This panel will explore the current state and future of the EEO-1 Component 2 pay reporting requirement in the U.S., the impact of other pay reporting requirements around the globe, whether the reporting requirement will move the needle toward more equitable pay, and some of the more practical and privacy implications.

PANELISTS: T. Scott Kelly, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., Birmingham, AL Anne B. Shaver, Lieff, Cabraser, Heimann & Bernstein, LLP, San Francisco, CA. The discussion is from 2:30 PM-3:45 PM.


Welch Consulting Employment Index Rises to New High in September

The Welch Consulting Employment Index rose to 102.9 in August, its highest level in over 12 years.

The Welch Index measures full-time equivalent employment after adjustment for population growth and the aging of the workforce. An Index value of 100.0 indicates that adjusted full-time equivalent employment is the same as its level in the base year of 2004.

Over the past 12 months the Index has risen from 101.7 to 102.9. The increase in the Index over the past year means that full-time equivalent employment has been growing at a faster rate than the adult population.  Full-time equivalent employment increased 1.2% faster than the adult population over the past year (after making adjustments for the aging of the U.S. adult population). Looking back at the most recent 6 months, the Index rose from 102.4 in March to 102.9 currently. The rate of change over the past year is modestly above the overall trend for the last 3 years of an increase of 1.1% per year. The most recent six months are showing a small decline in the rate of increase in the employment index.

In August the index for women rose, as did the index for men. The index for women rose dramatically from 106.0 to 106.5, setting a new all-time high. The index for women is up from 104.7 a year ago. The index for men rose 0.2 points to 100.1, offsetting most of the prior month’s decline. The index for men is up 0.8 points from its year ago value of 99.3. Over the last three years the index for women is up 4.7 points while the index for men is up 2.3 points.

Technical Note: Full-time equivalent employment equals full-time employment plus one half of part-time employment from the BLS household survey (the Current Population Survey). The data reported for a given month is generally from the calendar week that contains the 12th day of the month. The Welch index adjusts for the changing age distribution of the population by fixing the age distribution of adults to the distribution in the base year of 2004. Seasonal effects for the share of workers employed in part-time jobs are removed in a regression framework using monthly indicator variables.


Welch Consulting Employment Index Rises to New High in August

The Welch Consulting Employment Index rose to 102.6 in August, its highest level since March, 2007. Over the past 12 months the Index has risen from 101.4 to 102.6. The increase in the Index over the past year means that full-time equivalent employment has been growing at a faster rate than the adult population.  Full-time equivalent employment increased 1.2% faster than the adult population over the past year (after making adjustments for the aging of the U.S. adult population). Looking back at the most recent 6 months, the Index rose from 102.4 in February to 102.6 currently. The rate of change over the past year is modestly above the overall trend for the last 3 years of an increase of 1.0% per year. The most recent six months are showing a small decline in the rate of increase in the employment index.

In August the index for women rose while the index for men fell. The index for women rose dramatically from 105.3 to 106.0, setting a new all-time high. The index for women is up from 104.3 a year ago. The index for men fell 0.3 points to 99.9. The index for men is up 0.8 points from its year ago value of 99.1. Over the last three years the index for women is up 4.2 points while the index for men is up 1.9 points.

Technical Note: Full-time equivalent employment equals full-time employment plus one half of part-time employment from the BLS household survey (the Current Population Survey). The data reported for a given month is generally from the calendar week that contains the 12th day of the month. The Welch index adjusts for the changing age distribution of the population by fixing the age distribution of adults to the distribution in the base year of 2004. Seasonal effects for the share of workers employed in part-time jobs are removed in a regression framework using monthly indicator variables.


Hyowook Chiang, of Welch at the IAKL Conference in Seoul

Hyowook Chiang, Ph.D., Managing Director of Welch Consulting will be a commentator to discuss Recent Developments in Wage and Working Hour Regulations on September 21 at the IAKL (International Association of Korean Lawyers) Conference in Seoul.

Dr. Chiang has been invited as a commentator along with many notable speakers from around world. The panel will discuss Recent Developments in Wage and Working Hour Regulations. Korea is known for its long working hours. Addressing excessive work hours has been a priority of the current Moon government, and as part of this initiative the National Assembly amended the Labor Standards Act in 2018 to reduce maximum weekly work hours from 68 to 52. This new limit is being phased in over the next few years and is accompanied by greater restrictions on the use of extra overtime in certain industries. Businesses are still in the process of adjusting to the new reality and finding ways to get the most productivity out of their workforces under the new regime. The current government’s increased aggressiveness in employment-law enforcement, including wage-and-hour violations, has added to the urgency of dealing with these issues.

In this session, we will explore how these changes compare with wage-and-hour developments in other countries, some of which have been moving in the opposite direction towards a less restrictive legal regime.

To register: https://2019iakl.net/welcome/