Taking a Proactive Approach to Equal Pay

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For Equal Pay Day 2018, we’re looking at how countries are closing the gap

Today is Equal Pay Day, a day of recognition that began in 1996, in an effort to bring awareness to the gender pay gap, or the disparity between full-time men and full-time women in the workforce. Equal Pay Day is observed around the world as the day in the year the average woman has to reach before she earns the amount of money the average man earned the previous year.

For women, the exact day equal pay is earned varies by demographic. For example, Asian-American women will reach equal pay on February 22, white women on April 17, African-American and black women on August 7, Native American women on September 27, and Latinas on November 1.

Today, women in the United States make an average of 79 cents for every dollar a man makes. That breaks down to approximately 600 additional hours of work to close the gap.

 

America’s gender pay gap discussion

Certainly, there are multiple factors beyond run-of-the-mill gender discrimination for both the existence of the wage gap worldwide and its slow, laborious closing — the nuances of which have been discussed ad nauseam on both sides of the aisle and in articles and reports like this one, this one, this one, this one, this one, and this one.

And when you consider the impact of fair workweek laws, parental leave for both parents, and other policy changes that could increase women’s chances of securing higher paying work, a light at the tunnel almost emerges.

The gender pay gap has been getting smaller since former President John F. Kennedy signed the Equal Pay Act of 1963, which made it illegal for companies to pay men and women in the same workplace different salaries for similar work. And as we celebrate the 80th birthday of the Fair Labor Standards Act (FLSA) this year, it’s interesting to reexamine the gender pay gap and the laws that have been implemented to combat it.

 

Britain and Iceland respond

Some nations have taken major steps to ensure that working women have equal opportunities and pay by requiring companies to be more transparent about pay discrepancies between men and women in their organizations.

Last year, Britain introduced legislation requiring big companies (those with over 250 employees) to disclose information regarding gender pay gaps among their employees. The reporting of this information is mandatory, and companies that fail to report or miss the deadline face penalties.

Iceland has gone a step further to close the gender wage gap recently, creating a system of checks and balances by which employers with 25 employees or more are required to self-audit. In Iceland, it’s illegal to pay men and women differently for doing the same work without a reason. This year, companies in Iceland will also be required to set salaries based on the value of the work instead of the individual filling the role. The salary can be adjusted if more work-value is added, but it must meet the standards and include written justification.

 

Putting transparency, labor laws, and wage-for-work value into practice

As more employee-focused legislation sweep the nation, we can expect to see the employer-employee relationship shift with the times, but it’s unclear whether the closing of the gender wage gap will be accelerated.

Since the United States does not have laws, like Britain or Iceland do, in place for companies yet, there is an opportunity for the country to self-correct before the percentage freezes or more labor disputes are filed.

By borrowing from the models set by other nations, any American business owner can be proactive rather than reactive when it comes to pay disparities between men and women at their company. Transparency is key to creating a work environment wherein employees are comfortable talking about wages, and it’s a step in the right direction.

More transparency means both the employee and the employer are aware of pay disparities that could be taking place based on any type of discrimination. Further, when wages for specific jobs are set by the value of the work, everyone knows what is expected to attain a role, rather than which gender is expected to flourish.

1 Comment

  1. Julia says:

    An interesting read

    [Reply]

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