NEW YORK: Edelman is sending checks to 66 current and former female employees from its New York office who were paid less than males while holding the same position.
As the result of an agreement between the agency and the Department of Labor, each woman is owed $4,075.76 in back pay and $436.85 in interest for salary disparities between men and women that occurred from October 2012 to October 2013. The total amount owed, including interest, is almost $298,000.
According to the agreement, the employees were in the job code 2011 category, "which includes but is not limited to" vice presidents.
An Edelman spokesman would not say how many women had received checks so far, only that the agency had "attempted to notify everyone and [is] in the process of check distribution." At least one of the women confirmed to PRWeek she had received a check in July.
The agreement, signed in May by Russell Dubner, president and CEO of Edelman U.S., and the Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP), states that the OFCCP began evaluating Edelman’s salary policies on January 16, 2013.
According to Department of Labor spokesman James Lally, the audit was "neutrally scheduled" and not prompted by a complaint. Edelman is subject to OFCCP audits because it does work for the Federal Government.
As a result of the audit, on September 30, 2016 the OFCCP issued a notice of violation of executive order 11246, which prevents "contractors and subcontractors who do over $10,000 in Government business in one year from discriminating in employment decisions on the basis of race, color, religion, sex, sexual orientation, gender identity, or national origin."
According to Edelman executives, the agency found the problem itself in an audit of its own conducted prior to the OFCCP review.
"We had discovered the discrepancy and addressed it internally ourselves without notice from the OFCCP," said Maria O’Keefe, executive director, U.S. human resources for Edelman. "So we adjusted pay as part of the 2013 annual review process and when the OFCCP audit was conducted they identified the same issue and asked us to adjust compensation for the year 2012 to 2013 in which the discrepancy was present."
O’Keefe said the disparity was likely an unintentional consequence of routine staffing changes as people left the agency, replacements were hired, and people were given raises.
"These discrepancies can happen from time to time," she said, "which is why we do an internal audit annually to make sure this does not happen."
In addition, in the "violations and remedies" section of the agreement, the OFCCP stated it conducted a second audit shortly after the discrepancy was found and "determined there was no continued statistically significant disparity."
O’Keefe said that, as part of its diversity and inclusion efforts, Edelman routinely reviews compensation levels among employees.
"We do a full audit of HR practices regularly," she added. "It’s also important to note that we did a global gender pay analysis earlier this year." She said the recent study found women at Edelman were being paid 99% of the amount their male counterparts make.
"While that’s a good result, that’s not 100%," O’Keefe said. "Therefore we believe much more needs to be done to be sure we achieve 100%."
Gender equity is a priority at the very top of the agency, O’Keefe explained.
"Richard Edelman and his entire leadership is globally deeply committed to gender equity," she said. "He’s said he is committed to ensuring 50% of the agency’s leaders are women. It’s personal to him as the leader of a family business and a father."
According to the 2018 PRWeek Salary Survey, the median salary for a female was $88,000; for men it was $123,000. Females with five-plus years’ experience also reported much lower compensation than their male counterparts: $100,000 versus $135,000.
Edelman is the world’s largest PR agency by revenue, according to PRWeek’s 2018 Agency Business Report. In 2017, revenue was $893.6 million, up 2% from $875 million in 2016.