Goldman Sachs to Pay $215M in Settlements After Underpaying Women

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KEY POINTS

  • Goldman Sachs has agreed to settle a class action lawsuit accusing the bank of underpaying women.
  • It's important for female employees to know their worth and keep tabs on what their peers are making.

It's hardly a secret that women are statistically likely to be paid less money than their male counterparts. And that gender pay gap can have a world of repercussions.

When women earn less, they tend to save less. Not only does that translate into lower savings account balances, but it can also mean lower retirement plan balances -- and less long-term financial security.

Meanwhile, breaking into the predominantly male banking industry has long been a challenge for women. But getting hired at a major bank doesn't necessarily mean getting paid a fair wage, as one class action settlement clearly highlights.

A major bank is paying the price

Goldman Sachs has agreed to pay $215 million to settle a long-standing class action lawsuit that accused the bank of underpaying women. An estimated 2,800 female employees were part of the lawsuit.

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Not only will Goldman Sachs be paying the employees it wronged, but it's also pledged to hire an independent expert to conduct an analysis on its performance evaluation processes, as well as its processes for promotions. The goal is clearly to prevent a scenario where it discriminates against a specific class of employee -- whether intentionally or not.

Female workers need to stand up for themselves

The fact that Goldman Sachs was not allowed to get away with underpaying women is a good thing. Hopefully, the millions of dollars the banking giant is now shelling out will serve as a wake-up call for other institutions to reassess their compensation practices.

But the reality is that women can't just rely on their employers to pay them an equitable wage. Rather, they have to take matters into their own hands.

If you're a female employee, it's extremely important to know what salary you're worth. And to that end, it pays to research salary data using sites like Glassdoor to see how your wages stack up. In fact, in doing that digging, try to get data at the local level, since it's conceivable that if you work in Missouri, you might earn less than someone with a similar role who lives in New York City.

But that's not enough. You should also try to gather wage data from fellow employees whose roles are similar to yours. If you and a male colleague have held the same position for two years and have the same level of experience, but your male colleague is earning $5,000 more than you are, that's the sort of thing you have every right to bring up to your employer.

And if you're worried about retaliation from your employer for snooping on salary info, fear not. Under the National Labor Relations Act, you have every right to discuss wages with your fellow employees, and it's unlawful for your employer to punish or retaliate against you in any way for having those conversations.

Of course, getting your colleagues to open up about their wages isn't a given. But if you are able to get that information, don't hesitate to use it to your benefit if need be.

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