Salary inequity costly to Blues 55 women employees will now be sharing in $500,000 payout


September 14, 1996|By M. William Salganik | M. William Salganik,SUN STAFF

Blue Cross and Blue Shield of Maryland will pay a half-million dollars to 55 women employees in the wake of a federal review that concluded that the women were underpaid, compared with male employees, from 1986 to 1993.

Also, 46 of the women will receive pay raises.

Blues officials, although they agreed to the payment, said they did not concede the validity of the review methods used by the Office of Federal Contract Compliance Programs.

"I should note that BCBSM disagrees with the process used by the OFCCP because the audit's methodology failed to consider the level of responsibility and the amount of technical knowledge required for various positions," William L. Jews, president and CEO, wrote in a letter to all Blue Cross employees this week.

However, Jews continued, "To avoid delays in reconciling the salaries of the 55 affected employees, I have decided not to dispute the OFCCP findings -- an action that could have resulted in a lengthy legal challenge. I believe this is the right way to treat our employees and is consistent with the direction I have been trying to set since my arrival."

The federal compliance office, which is part of the Department of Labor, reviews companies that hold federal contracts to ensure that they comply with federal labor standards.

The study of Blue Cross was a routine review, not prompted by any complaints.

Sharon Vecchioni, the Blue Cross vice president of human resources, said the review used a methodology that is new and untested, comparing "chunks of employees" grouped into wide "salary bands."

The problem cited in the review, according to a source, involved a salary band containing 180 professional employees where the federal officials concluded that women were generally given smaller raises than were men, even though their job ratings were equal or better.

The $500,000 settlement figure was negotiated, the source said.

Vecchioni, in an interview, and Jews, in his letter, attributed problems to a "decentralized" management structure at the Blue Cross before Jews became CEO three years ago, which resulted in "11 different compensation systems" being used in the organization.

"We took a number of actions to correct these issues," Jews wrote, "including centralizing our compensation system under one unified program."

Now, Vecchioni said, "We believe people are being treated fairly. We are very proud of our affirmative action program."

She said Blue Cross has 3,200 employees, of whom 80 percent are women and 30 percent are members of minority groups.

Although she said she did not have percentages for employee categories, such as management, she said, "We have a good representation of women and minorities throughout the organization."

Jews stated that the federal findings involved only "a small number" of employees and that the review "identified no problems in our recruiting, hiring, disciplinary action, promotion, termination or leave practices."

Pub Date: 9/14/96

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