Minimizing the Potential for Wage Discrimination in Your Organization
If pay discrepancies exist, firms need to find ways to eliminate them.
Here's a sobering statistic: according to the National Women's Law Center, women that work full time earn 80 cents for every dollar paid to men. For women of color, the NWLC believes the gap is even greater.
Wage discrimination has long served as a lightning rod in the fight for those pushing equality in the workplace. And it turns out gender-based pay discrimination isn't just a problem in the United States — Forbes says a significant gender pay gap exists in many highly developed nations. With pay gaps between men and women ranging from 4.5 percent in Greece to a staggering 36.7 percent in South Korea, clearly, there's a long way to go before organizations eradicate wage discrimination. By way of comparison, Forbes reports an 18.1 percent gap in the United States.
Governments Force Transparency
In the United Kingdom, where Forbes reports a 16.8 percent gap exists, organizations with over 250 employees must report their gender pay gap to the Government Equalities Office. Many household names, including big accountancy firms and global financial firms, revealed gender pay gap data that paint a potentially troubling picture of compensation practices at major corporations.
Closing the Gender Pay Gap
In the United States, both federal and state laws exist to prevent pay discrimination based on gender, in particular the Equal Pay Act, which is one of five major laws that addresses equal pay and compensation. At the state level, most states have laws to combat wage discrimination based on sex.
While the payments required to correct for gender pay discrimination can add up, the adverse media coverage that often accompanies news of pay inequity paints companies in a bad light. So what can your executive team do to ensure equal pay in your workplace?
- Compliance starts with education. Treating women fairly in the workplace when it comes to pay starts with a commitment to employ an equitable approach to the payment of wages. Make sure hiring managers and the human resources professionals that support them understand what constitutes a violation of federal or state law.
- Keep close tabs on wage rates. Gender pay discrepancies don't appear instantaneously, they tend to emerge and build over time. Conduct annual pay check ups to uncover discrepancies. Make sure you protect pay audits and the resulting analysis by ensuring that a member of your legal team, or a third-party law firm, directs the exercise. In the event the audit uncovers differences in male and female pay for those performing the same role, make sure you develop a plan to resolve the gaps identified quickly as the difference will only grow if left unaddressed.
While the pay decisions made in prior years contributed to inequality, it's never too late to fix the gender pay gap. And as more governments consider compelling businesses to report their gender pay data publicly, the need to pay men and women equally will become an even greater issue in years to come.
For additional data and insights tied to Equal Pay, read Rethinking Gender Pay Inequity in a More Transparent World, published by the ADP Research Institute®.
