Pay Equity: Are You Paying Your Employees Fairly?


Businessperson Giving Cheque To Colleague

Is pay equity getting a fair shake at your business? In 2017, female full-time, year-round workers made only 80.5 cents for every dollar earned by men, a gender wage gap of 20%, according to the Institute for Women’s Policy Research. If progress toward pay equity continues at the current snail’s pace, IWPR estimates it will take until 2059 for women to reach pay parity. For women of color, the news is even worse: Hispanic women will have to wait until 2224 and African-American women will wait until 2119 for equal pay.

How well are small and midsize business owners (SMBs) doing at creating equal pay in the workplace? A new TSheets Equal Pay Survey of both employees and business owners has some insights.

Different views of pay disparity

Not only is there a disparity between men’s and women’s pay, there’s also a gap in how employees and employers view the issue. Only 22% of employees in the survey (15% of women and 28% of men) believe employers are doing enough to promote equal pay in the workplace. But 71% of business owners believe they are doing enough to address this issue.

Should men and women always receive equal pay? One in five business owners say they do not believe men and women should always be paid equally. Nearly three-fourths (72%) of women business owners believe men and women should always receive equal pay, compared to 60% of men business owners.

Of course, women and men don’t always do the same jobs, which is one reason for pay disparity. Women are more likely to take time off to raise children or care for parents, leading to less time in the workforce. Pay equity seeks to take into account these gaps by compensating men and women equally for comparable (not just identical) jobs.

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Some 92% of the business owners who took part in the survey say they are taking steps to improve pay equity at their companies. Almost two-thirds (64%) have a formal pay scale and 55% have an equal pay policy. But in spite of these claims, 23% of business owners surveyed admit they have never analyzed pay rates by gender, and just 32% have done so in the past 12 months.

The risks of unequal pay are real. More than one-fourth (26%) of business owners in the survey say an employee has filed a lawsuit against them over equal pay.

Taking steps towards pay equity

How can you change things at your business and make progress toward equal pay? The National Committee on Pay Equity recommends taking these 10 basic steps:

1. Conduct a recruitment self-audit: Do you actively look for diversity when hiring?

2. Evaluate your compensation system for internal equity: Do you have a consistent system for determining wages and benefits, such as creating written job descriptions and developing pay grades or scores?


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