BUSINESS
01/12/2015 01:18 pm ET Updated Dec 06, 2017

Charlize Theron Proved You're Better Off When You Know Your Co-Workers' Pay

Charlize Theron speaks on stage at Sean Penn And Friends "Help Haiti Home" Gala - Show at the Monta
Charlize Theron speaks on stage at Sean Penn And Friends "Help Haiti Home" Gala - Show at the Montage Hotel on Saturday, Jan. 10, 2015 in Beverly Hills, Calif. (Photo by John Shearer/Invision/AP)

At least one good thing came out of the massive Sony Pictures hack -- a big raise for Charlize Theron. It's the latest proof that transparency can level the playing field for women seeking equal pay for equal work.

Theron, an Oscar-winning actress, reportedly used the hack against Sony late last year to negotiate a deal worth more than $10 million in order to get paid the same as her male co-star, Chris Hemsworth, for their upcoming film “The Huntsman.” Though the hack revealed nothing about her or Hemsworth's pay for the movie, it did show how women in Hollywood often earn less than their male counterparts, reportedly inspiring Theron to demand equal pay.

This is a prominent example of something lawmakers, experts and advocates have been saying for years: When women know how much their co-workers are getting paid, they’re more likely to be paid fairly.

“It’s a very basic check on discrimination,” said Ariane Hegewisch, the study director at the Institute for Women’s Policy Research, a Washington-based think tank. “If you don’t know whether you're paid equally you can’t enforce your right.”

Indeed, perhaps the most famous advocate for her right to equal pay, Lilly Ledbetter, didn’t start fighting for more money until an anonymous note tipped her off to the fact that she was making less than her male colleagues. Her demand for more pay eventually went all the way to the Supreme Court, which rejected her claims, saying she had filed them too long after the discrimination against her began. The first piece of legislation President Obama signed into law bears her name and ensures that workers can bring discrimination claims well after the first evidence appears, by arguing that discrimination accrues over time.

Anecdotally, companies that do have a policy of making their pay transparent say it’s helped to create equality. Dane Atkinson, the CEO of SumAll, an analytics company that gives employees access to each other’s pay information, told the Society for Human Resource management that transparency is the “single-best protection” against gender bias.

The federal government -- “where you can Google somebody’s pay” -- is another example of how pay transparency can work in women’s favor, according to Hegewisch. There, women in white-collar jobs make 87.3 percent of what their male colleagues earn. Compare that to other professional jobs, such as financial managers, marketing and sales managers and CEOs, where women all make less than 70 percent of what their male colleagues earn, and you can see how women make more when pay is public.

Knowing what a male colleague makes can help a woman negotiate a better deal. And when companies are transparent about their criteria for promotions and raises, managers are less likely to resort to biases when determining who should move ahead or get more money, studies show.

All of this helps explain why Democratic lawmakers have been pushing for a bill that would make it illegal for companies to ban workers from talking about their pay. Obama also issued an executive order last year prohibiting federal contractors from retaliating against employees that discuss their pay. About 60 percent of men and women in the private sector say their companies don’t allow pay discussions, according to a 2010 IWPR survey.

pay chart
This chart from IWPR shows the share of employees who say they can't discuss their pay at work.

Still, making it easier to find out your colleagues’ salaries won’t erase the pay disparity for all women. One big reason why the gender pay gap persists is because women are often steered into fields that typically pay less -- about two-thirds of low-wage workers are women. Transparency won’t change the fact that many occupations are often valued less simply because they’re considered “women’s work.”

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