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California State Auditor Report Number : 2015-132

County Pay Practices
Although the Counties We Visited Have Rules in Place to Ensure Fairness, Data Show That a Gender Wage Gap Still Exists



Summary

HIGHLIGHTS

Our audit concerning county pay practices and policies at four California counties—Fresno, Los Angeles, Orange, and Santa Clara—revealed the following:


Results in Brief

After reviewing employee compensation data from four counties—Fresno, Los Angeles, Orange, and Santa Clara—our audit found that, in the aggregate, female county employees earned between 73 percent and 88 percent of what male county employees earned from fiscal year 2010–11 through fiscal year 2014–15.1 In fact, the data show that this gender wage gap has slightly widened at each of the four counties over the five-year period we reviewed. For example, for Los Angeles County positions, women earned roughly 80 percent of the average total compensation for men in fiscal year 2010–11, but this figure dropped to 76 percent by fiscal year 2014–15. Our calculations of these differences are based on gender pay disparities in the aggregate. We also focused our review on 1,855 specific job classifications, or groups of job classifications, with similar compensation and found 45 percent more classifications in which men earned more than women.

The counties’ compensation data also show that female employees were more likely to occupy classifications that provided relatively low- to mid-levels of average total compensation, whereas their male counterparts tended to be concentrated in mid-level to highly compensated county classifications. We generally found that men outnumbered women in classifications for which the average total compensation was $160,000 or more for fiscal year 2014–15, even though women accounted for between 54 percent and 60 percent of all full-time employees we reviewed. With women more often occupying classifications that pay at the mid- to lower-end of the salary strata we reviewed, the aggregate wage gap in the four counties we reviewed appears to be influenced by the types of job classifications women occupy.

Additionally, when we looked more closely at groups of job classifications with similar compensation amounts, we found that pay disparities between men and women were often between less than 1 percent and nearly 9 percent. For example, in classifications with average total compensation of $240,000 or more in Orange County, men earned average total compensation of $268,122, while women in the same classifications earned, on average, $265,165—a difference of roughly 1.1 percent.

We also reviewed groups of county employees working within the same classifications and county departments (regardless of the employees’ full-time status) to understand why differences in salaries existed. We reviewed records for 161 individual employees within 46 classifications, many of which displayed variances of 20 percent or more between men’s and women’s pay. Although we found no evidence of gender discrimination, our review revealed a multitude of factors that can result in differences in pay among employees working within the same job classification. These factors include the starting salary for each employee in his or her current county job, which can often be influenced by prior pay in a previous county job; the length of time spent by the employee in his or her current job; and whether the employee worked full-time or part-time during the entire fiscal year. Our review found that the disparities in pay were often influenced by a combination of these factors, but part-time versus full-time employment was the single most significant factor. As a result, our analysis of the counties’ compensation data that we previously discussed was based only on data for full-time employees.

We found that the counties we visited often did not keep records documenting why a particular candidate was ultimately selected for employment over other qualified candidates. Consequently, we could not always determine whether counties were using valid job-related criteria when deciding whether to employ particular male or female candidates. Applicable civil service rules do not require that counties document their hiring rationales; instead, counties are to focus on establishing rules and maintaining supporting documents covering the events leading up to actual hiring decisions. Nevertheless, if challenged, employers—including the four counties we visited—must successfully demonstrate that their decisions to hire certain individuals (or not to hire others) did not result from discriminatory employment practices.

In our view, it is reasonable to expect hiring managers to have some basis for selecting candidates and to document these decisions. During our audit we evaluated 240 hiring decisions (60 for each county), of which 195 hiring decisions were for positions covered by the civil service rules of each county, and 154, or 79 percent, of the 195 decisions were filled through competitive recruitment. However, even when the counties followed competitive processes, they could only provide documentation explaining why they chose the successful candidates or alternatively why they did not select others, in 39 of the 154 competitive recruitments we reviewed.

We noted that only Santa Clara County instructed its hiring managers to document why the individuals who were interviewed were or were not selected for employment. Moreover, the county’s rules provide examples of appropriate and inappropriate rationales regarding candidate selection. Although our testing of hiring processes at the three other counties showed that both men and women successfully passed screening exams, got on certified eligibility lists, and were contacted for hiring interviews, the hiring decisions themselves were generally unclear, and we could not further scrutinize and evaluate the counties’ decision making. Similarly, all four counties did not document hiring decisions for positions not covered by civil service rules. Of the hiring decisions we reviewed, 45 were for unclassified positions, or those positions excluded from civil service rules and considered at-will appointments because employees who fill them can be terminated without cause. These positions are often senior- and executive-level management positions, but the four counties we visited could document their rationales for hiring candidates for these positions in only three of the 45 decisions we reviewed.

Nevertheless, the State has an opportunity to ensure that counties not only document the bases for their hiring decisions but also actively prevent and monitor pay disparities and then report their findings to the public and local officials. State law requires the California Department of Human Resources (CalHR) to periodically perform audits of counties’ hiring and compensation practices under the State’s mandated civil service rules. The Legislature could amend state law to establish the expectation that counties must be capable of objectively explaining, at the time of hire, why candidates who were interviewed were or were not selected for employment. CalHR’s audits could then evaluate and report on whether the stated hiring decisions were, in fact, objective and job-related. Further, the Legislature could require counties to periodically evaluate, by job classification, the differences in men’s and women’s compensation and to determine which county pay policies have contributed to any significant variances identified and whether such policies require modification to eliminate or reduce gender-based pay disparities. Finally, counties should share these analyses with local leaders, such as locally elected boards of supervisors, so that the committee leaders and the public can have an ongoing discussion and understanding of where significant pay disparities exist and the pay policies that contribute to them.

Our audit evaluated an additional 60 salary-setting decisions for each of the four counties—or 240 total decisions—to understand how counties determined pay. Our review found that counties consistently followed their own pay policies, but such policies may place at a disadvantage those who are returning to the workforce following extended absences. For example, 57 of the 240 salary decisions we reviewed involved individuals who were newly hired in their respective counties, and 42 (12 males and 30 females) were employees earning the minimum amounts for their salary ranges. We further noted that women were hired at their positions’ minimum salary rate in 30, or 79 percent, of the 38 cases we reviewed, and men were hired at their positions’ minimum salary rate in 12, or 63 percent, of the 19 cases we reviewed. A variety of factors unrelated to the qualifications or capabilities of the employees could have caused these results. Some counties noted that they have policies to set the salaries for new county employees at the minimum rate for their respective positions. In other cases, counties indicated that even though the successful candidates exceeded the minimum qualifications for many of the classifications that we were evaluating, the counties did not have difficulty recruiting for these classifications, and thus the counties were often unwilling to pay higher amounts regardless of candidates’ qualifications.

We also examined 54 salary-setting decisions for classifications in which each salary amount fell within a broad-range without any pre-defined salary steps (broad range schedule), and we noted that the differences between the minimum and maximum salaries in these broad-range positions was sometimes large. For example, the difference between the minimum salary of $122,408 and the maximum salary of $250,016 for the chief child psychiatrist position in Fresno County was $127,608. An employee’s salary within a broad range can be the result of negotiations that federal law, state law, and county policies do not require the counties to document. Nevertheless, we analyzed how often the 54 employees (30 male and 24 female) received salary amounts above the midpoints of their respective salary ranges. The data in our selection indicated that women were less likely than men to obtain salaries above the midpoints for their job classifications. Specifically, 24, or 80 percent, of 30 men in our selection and 15, or 63 percent, of 24 women successfully negotiated or otherwise received salaries above the midpoint levels of their salary ranges.

During our audit, we also attempted to obtain all wage and promotional discrimination complaints filed with the four counties we visited as well as the complaints’ outcomes; however, we had difficulty identifying whether complaints pertaining to pay or promotional disparities were specifically based on gender. Although we found that all four counties we visited had policies to respond to alleged instances of pay discrimination in the workplace, the counties do not specifically track gender-based wage and promotional complaints, and neither federal nor state law currently requires that counties track this information. Nevertheless, our review of county complaints found that relatively few—36 complaints out of 14,674—appeared to pertain to complaints alleging sex-based discrimination regarding wages or promotional advancement. Of the 36 complaints we identified, 10 complaints are still under investigation, 25 complaints were not substantiated, and one was substantiated; however, this substantiated complaint is still in litigation, and we cannot discuss the specifics of the allegation. Because of the limitations in the counties’ tracking processes, it was difficult to determine how often employees filed sex-based pay equity complaints, and the actual number of these types of complaints could be higher. Counties could benefit from identifying and tracking complaints that allege sex-based discrimination involving equal pay issues or promotional opportunities. Knowing how frequently these complaints are filed and whether such complaints are focused at particular departments could be useful information for county officials as they attempt to monitor gender equity issues among their employees.

Finally, both the public and county employees could benefit from better data collected by the State Controller’s Office (Controller). The Controller currently collects public employee compensation data by employer and classification on its Government Compensation in California website, but it is not currently required to collect information on the sex of those employees. To enhance transparency and accountability regarding gender pay equity, the Legislature should amend state law to require public employers to report sex information when submitting the employee-specific data to the Controller.


Recommendations

Legislature

To ensure that counties consistently monitor pay disparities between male employees and female employees and to ensure that counties perform these reviews and publicly report their findings, the Legislature should amend state law to do the following:

If the Legislature desires that counties be able to demonstrate that their hiring decisions for civil service positions are based on objective and job-related criteria, it should amend the state law to require that each county document the reasons why it chose the selected candidate over others from the certified eligibility list.

To ensure that the general public and legislative decision makers have readily available data on male and female employees’ compensation by specific classification and public employer, the Legislature should direct the State Controller’s Office to obtain information on the sex of each public employee reported on the Government Compensation in California website.

Counties

To ensure that they can consistently demonstrate that candidates are hired for permanent civil service positions based on valid and job-related criteria, regardless of their sex, each county should develop policies requiring hiring managers to document the reasons why they chose the selected candidate over others from the certified eligibility list.

To ensure that they can readily monitor gender-based pay equity complaints and reliably evaluate how often such complaints are filed by its employees, each county should develop tracking mechanisms that allow management to reliably determine how often these complaints occur and whether there are patterns of complaints that pertain to specific county departments or classifications.


Agency Comments

Fresno, Los Angeles, Orange, and Santa Clara counties generally agreed with our conclusions and recommendations and offered additional comments regarding specific policies and practices at their individual county.




Footnote

1 To identify wage disparities between male and female county employees who occupied comparable positions—and to mitigate the effects of midyear promotions, transfers, or other employer actions that can influence salary amounts and pay differences—we limited our analysis to include only full-time employees who were active in a single job classification for the entire fiscal year. Moreover, to maintain consistency with federal law, we include in figures for salaries and wages the employees’ benefits, such as employer contributions to health care and retirement, and additional payments, such as overtime and paid leave. Go back to text



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