Satya Nadella’s job was tough enough from the start. He followed Microsoft lifer Steve Ballmer and founder Bill Gates into the CEO role at a time when the company is looking to keep its businesses rolling in the face of a changing industry, slower PC sales, and serious pressure on its bread-and-butter Windows and Office products. Overall, the consensus is that he has done well. 
A misplayed comment last week, however, earned him some derision and led to a quick retraction. During the Grace Hopper Celebration of Women in Computing in Phoenix, Nadella suggested that women in the tech industry shouldn’t ask for pay raises and trust that their contributions would be rewarded in the long run. The audience didn’t exactly receive the advice well, and he quickly retracted the comment.
This episode is timely because arguments over gender differences in pay have been a hot topic in recent years. Folks on all sides of the issue can point to various statistical data to compare pay between men and women but, regardless of your take on the issue, the fact is that a number of federal and state laws make relative pay among men and women a key consideration for any personnel manager.
The federal side of this equation goes back to 1963, when the Equal Pay Act amended the Fair Labor Standards Act. The EPA prohibits pay discrimination for “equal work on jobs the performance of which requires equal skill, effort, and responsibility, and which are performed under similar working conditions….” The EPA will allow differences based on seniority, quantity or quality or work, a merit system, or any other factor other than sex. Congress routinely considers amendments to the EPA, like the Paycheck Fairness Act, to bolster the EPA’s remedial provisions and prohibitions.
Additionally, a 2007 Supreme Court opinion prompted Congress to pass the Lilly Ledbetter Fair Pay Act, which altered the statute of limitations for pay discrimination claims brought under a host of antidiscrimination statutes like Title VII of the Civil Rights Act of 1964. The practical affect of the Ledbetter Act is still a subject of question, particularly as to how far back in time plaintiffs may be able to go to recover damages in pay discrimination claims.
When Mr. Nadella walked back his statements, he assured everyone that if a woman believes she is due a pay raise, she should absolutely ask for one. Very true. And for any employer that receives such a request, you should take the chance to ask yourself whether the pay decisions the company has made are based on defensible reasons other than sex.
