What is the gender pay gap; what is pay equity?
The gender pay gap relates to the average difference in pay between men and women. Pay equity or equal pay relates to the question of whether men and women are paid equally for equal work. Many organizations have a gender pay gap; this is typically influenced by a variety of issues, but particularly the lack of women at senior levels of the organization. That in itself may be driven by a range of reasons, including lack of career progression, and occupational and career choices. It does not necessarily indicate that there is discrimination either in relation to pay or progression, but in some organizations, that may be a factor.
Why does it matter?
Narrowing the gender pay gap is not just about addressing inequality. Evidence shows that diverse organizations outperform their peers. It is also important from a talent perspective, as candidates may view it as a indicator of whether the employer has an inclusive culture that will provide a level playing field in terms of opportunity. The topic attracts significant investor interest, and regulation is also increasing, meaning this is both a brand and financial issue.
What is being done about it?
Most countries have legislation prohibiting discrimination in respect of employment decisions and requiring equal pay for equal work. But the gender pay gap has been slow to close, prompting a number of governments to introduce more stringent requirements. These range from requiring employers to report publicly on their gender pay gap, to more aggressive regulation such as requiring disclosure of compensation paid to peers and bans on asking job applicants about their previous salary. Investor groups, particularly in the US and UK, are also becoming more active in using voting powers to demand transparency and action.
|Regulation is likely to increase but will not be globally consistent, while scrutiny from investors will likely intensify.||Get the right message across to multiple stakeholders about the different ways of defining the gender pay gap.|
|How does the need to address the gender pay gap fit in with your culture and values?||Discrimination is one of the causes of the gap. What is the extent of that risk in your business?|
|Are your diversity initiatives narrowing the gap quickly enough?|
We can advise you on gender pay and equal pay obligations by jurisdiction and on the likely developments globally. We can help you identify hotspot countries — those with the highest reputational, regulatory, financial and employee relations risks of non-compliance. We can advise you on the nuances in each jurisdiction where the company has employees, from the types and forms of “compensation” to include in audits, to how to properly aggregate and share data in light of applicable data privacy regulations.
We can undertake pay audits (including our own in- house analysis of data) to identify potential exposure, and advise on strategies to reduce legal risk. We can also advise on pay policies and training materials. We know confidentiality is paramount and take great care to ensure and protect legal privilege whenever possible.
Our experienced employment litigators regularly defend individual and class actions and challenges to pay practices. We partner with our clients to develop a strategic, cost-effective approach to proactively minimize risk in the pay equity arena as well as assisting clients in managing communications.