Gender Equity Guide to Equal Pay

The pay gap persists with women earning only 81% of what men earn, a disparity that is significantly exacerbated for Black and Latinx women.* Although the pay gap has narrowed, progress towards parity has stalled as the gap remains unchanged over the past 15 years. Employers can do more to advance gender equity not only because it’s the right thing to do, but also the smart thing. Studies have consistently shown how investing in women enhances numerous businesses metrics such as productivity, financial returns, innovation, profitability, stock market performance, access to greater talent, and employee retention.* Reaping these benefits requires intentional and consistent implementation of workplace policies and strategies designed to disrupt cultural bias and design equitable workplaces.

Here are five key strategies and a collection of resources and tools that employers can use to help close the pay gap. 

1. Shine a light on pay with regular compensation audits.
2. Start with pay equity at hiring by removing bias and salary history.
3. Be a responsible employer that follows the law.
4. Evaluate workplace policies and disrupt bias to level the playing field.
5. Make pay equity your business strategy with more women in leadership.

1. Shine a Light on Pay

How can you help close the gender pay gap? Shine a light on pay.

Pay transparency is key to close the pay gap. Conducting consistent and intersectional compensation audits can help identity gaps, foster company culture that values pay equity, develop strategies for remedying identified gaps, and establish accountability for addressing disparities. Don’t forget to evaluate bonuses, stock options, and commissions too!

Learn more about this strategy:

Tools to help:

2. Start Pay Equity at Hiring

How can you help close the gender pay gap? Start with pay equity at hiring.

The pay gap starts at the hiring stage. Women often graduate to a pay gap in their first job that follows them to every new job. Eliminating the practice of using prior salary history to set wages of new employees helps prevent perpetuated gender wage discrimination based on previous salaries. Establishing consistent and transparent criteria for hiring can lessen the impact of bias on decision-making and establishing a mandate for diverse candidate slates and a diverse, cross functional panel of interviewers can help maintain commitment to diversity throughout the hiring process. Additionally, encouraging education about negotiation awareness and strategy empowers women and all employees to advocate for fair compensation during hiring processes. 

Learn more about this strategy:

Tools to help:

3. Know your Responsibilities Under the Law

United States

  • The Lilly Ledbetter Fair Pay Act of 2009 counters pay discrimination by empowering individuals to effectively assert their rights under federal anti-discrimination laws. Each discriminatory paycheck resets the 180-day limit to file a claim, and as a result, employers will continue to be on the hook for discriminatory pay practices.  
  • The Equal Pay Act of 1963 has made it illegal to pay different salaries to employees of different sex or race for equal work and applies to all workers in the United States.

California

  • California’s Equal Pay Act applies to all California workers including public workers and prohibits employers with more than 50 employees from paying employees of different sex, race, or ethnicity differently for doing substantially similar work unless based on a bona fide fact. It prohibits employers from seeking an applicant’s salary history and relying on salary history for setting pay, and requires employers to provide a pay scale to applicants upon reasonable request. Further, it permits employees to discuss their pay with coworkers by prohibiting pay secrecy policies.
  • Corporations: Board of Directors (SB-826) enacted in 2018 applies to publicly traded companies whose principle headquarters are in California and requires boards to have at least one woman by the end of 2019 and two to three women by the end of 2021 depending on the size of the board. This bill contributes to the advancement of pay equity, as increased female representation on boards can improve pay parity and gender equitable practices. 

San Francisco

  • San Francisco Parity in Pay Ordinance enacted in 2018 prohibits employers from asking applicants about their current or past salary, considering an applicant’s current or past salary in determining whether to hire an applicant or what salary to offer (unless the applicant voluntarily discloses his or her current or past salary), and disclosing a current or former employee’s salary without that employee’s authorization. This bill prevents perpetuated gender wage discrimination based on previous salaries.

Learn more and find tools to help:

4. Evaluate Workplace Practices and Disrupt Bias

Efforts toward wage equity can often be characterized as well intentioned but not integrated as part of the performance structure of the organization. Gender equity initiatives should be implemented through internal goal setting with the ability to measure progress. Combatting the systemic nature of pay discrimination requires the implementation of tools that evaluate workplace practices and strategies that interrupt the transmission of implicit bias in business systems. Interrupting the transmission of bias in the workplace entails implementing formalized workplace policies, such as providing flexibility to all employees to foster cultural expectations and comfortability with flexibility. Additionally, building a diverse employment pipeline by hiring more women and promoting women to executive levels throughout an organization creates role models and mentorship which can help mitigate the influence of bias. If women are hired but then don’t witness advancement for women in their fields, their own advancement won’t be regarded as obtainable nor culturally acceptable in their workplace. 

Learn more and find tools to help:

5. Make Pay Equity Part of Your Business Strategy 

Research has consistently proven the business case for investing in women. Investing in women employees can result in higher returns on assets, equity, sales, investment, and invested capital. Increased diversity can also lead to enhanced productivity, innovation, stock market performance, access to greater talent pools, and teamwork. Integrating pay equity into business strategy requires increased representation of women on boards, executive positions and other leadership positions. Gender diversity on boards can enhance gender equity as a cultural and business priority throughout an organization, and studies reveal women leadership to be the catalyst for a strong internal pipeline for promotion and hiring rates for additional women. In addition to enhancing your financial metrics, increased representation of women throughout your organization can help shape internal business practices such as more equitable workplace culture and policies that address the pay gap. 

Learn more about this strategy:

Tools to help:

 

*The Institute for Women's Policy Research's 2018 Gender Wage Gap report found that Black women earn 
65.3% and Latinx women earn 61.6% of White male earnings. 

*Jeni Klugman, Laura Tyson & Genevieve Smith, “Business Culture & Practice: As a Driver for Gender
Equality & Women’s Economic Empowerment” Empower Women, Nov. 2016.

View Ann Lehman's profile on LinkedIn

This guide was launched on Equal Pay Day, the day that marks how far into the next year the average woman in the US has to work in order to make as much as a white man did last year.

Women make less than men in nearly every job and women of color face an even greater pay gap.

Employers can and should be doing more to help close the pay gap--not only because it's the right thing to do, but also the smart thing.