US Equal Pay Day 2023: Is Pay Transparency the Answer? 

US Equal Pay Day 2023: Is Pay Transparency the Answer? 

We’ve come a long way in closing the gap and moving toward equality, but work still needs to be done. However, milestones in battling discrimination and prejudice are worth celebrating, especially in this era of diversity, equity, and inclusivity. One of these milestones is paying attention to the wage gap experienced by professionals varying in gender, race, age, etc.

This is the goal of today’s symbolic day. US Equal Pay Day 2023 is a particularly great opportunity to not only investigate celebrating how far we’ve come when it comes to the pay gap but also to raise awareness on where else we need to focus. Let’s also discuss what you can do as employers to promote pay transparency so that your employees are confident that pay equity is given importance.

Related reading: Why a Diverse Workforce Makes You an Employer of Choice 

 

What is the current situation in the crusade for equal pay? 

Ever since President Kennedy signed the Equal Pay Act of 1963, corporations have been doing their best to make sure that pay is based solely on one’s professional background and responsibilities within the job, not on one’s gender or heritage. With efforts from the Equal Employment Opportunity Commission to ensure equality in pay is achieved, society has undoubtedly moved forward in many ways.

Closing the gender pay difference has shown a positive change in the past years. Before Kennedy signed the act into law, women earned an average of 60 percent of men at that time.1 The gender wage gap is at 83 percent, meaning efforts to close the gender pay gap are working. However, this is not the case for black women. They only earn 58 cents for every dollar a man makes, a USD 907,680 difference between a black woman’s and a man’s annual salary.2

Zooming into specific industries reveals existing gaps in salary still affecting women and people of color:

In a report delivered two years ago about the technology industry, men were offered 59 percent higher salaries for the same role provided for women. Also, women or people of color have developed an expected wage gap compared to their white male counterparts,4 meaning they are aware of this reality.

Manufacturing is also guilty of this pay gap. In California, female employees earn USD 7,000 less than their male counterparts, and a person of color earns USD 7,300 less than male professionals.5

STEM workers, including engineers, also experience gaps in their salaries. The gender gap is at 74 percent, while compared to white professionals, Asians, Hispanics, and Blacks were at 127 percent, 83 percent, and 78 percent, respectively.

Related reading: Reinventing Tech Job Requirements for IT Professionals 

Progress in the past decades cannot be denied, but gaps remain. This is why developments with law enforcement were apparent to continue battling pay inequality.

 

What are the laws concerning pay transparency in the US? 

The first day of the year saw the rise of newly enacted laws promoting a healthy discussion of wages. Leading companies to be transparent about their workers’ salaries encourages trust and confidence in their employers and in continuing the battle for pay equality.

California’s amended labor code and Washington’s Equal Pay and Opportunities Act are similar in requiring companies with at least 15 workers to be upfront with salary figures in job postings. Whether it’s on their company websites or job boards like Glassdoor or LinkedIn, it’s required that they indicate a salary range. In Washington, benefits such as health insurance and PTO must be listed clearly. In California, they are required to provide a pay scale for current employees upon request.

Rhode Island took a different route by not requiring job posts to have a salary range. However, applicants are free to ask, and companies must provide them. They can give a minimum and maximum figure to be offered before they discuss compensation. Similar to California, current employees may ask for a pay scale, too.

New York is expected to have a similar law in effect by November. Governor Hochul wishes that this law will be effective in finally closing the gap in wages, between genders and ethnicities, at least in their state.

 

Are these laws effective in closing the gap? Of course! 

Instead of employees speaking in hush tones or harboring negative feelings towards management, promoting salary transparency encourages everyone to talk about their pay in healthy avenues. They’ll also know how to reach a particular pay level.

Salary is a taboo topic in the office, but it’s common knowledge that when workers feel something is not sitting well with them, they’ll likely talk about it. Leading your workforce to direct their questions through correct conversations not only clears the air but also promotes your brand as a fair and transparent employer.

It’s also a specific way of nipping salary gaps in the bud, at least within your organization. Employees who think they are not getting what they are supposed to get may be subject to reevaluating their salary compared to their background and current responsibilities. On the other hand, they can be given pointers on what to do to reach a certain salary point. More studies, perhaps? Involvement in company projects? These ideas can be relayed by sitting the employee down for a conversation.

Pay transparency does not encourage employees to reveal their pay figures willy-nilly. It’s only a way for them to understand where they are in their professional journey salary-wise and to motivate them to reach great heights and break glass ceilings even when it comes to their career goals. Pay transparency is also a wake-up call for company leaders like you if there are people on your team that are not paid correctly. Rectifying this problem sends a message to the employee that they are looked after, and they’ll appreciate his concern.

Think of your employer brand as well. Wages are a significant concern for your workers, and imagine what they’ll say about your company when asked how salary concerns are handled. It’s also nice to communicate to others how you and your company are doing your best to end the ongoing battle for equal pay.

Related reading: Energizing Your Workforce

US Equal Pay Day 2023 is just one day, and your company is only one employer. There are still several steps to take to make sure that fair pay is achieved for every US professional, moreover, for the entire globe. But your mindfulness with this aspect of DEI will be greatly appreciated. Come next year’s national equal pay day, you and your workforce will be happy with the results if you start making pay equity and transparency a priority today.

 

Find the best employees through DAVIS Companies.

Equal pay and pay transparency are only some of the obstacles in today’s society. But by identifying these obstacles and working together, success is on the horizon. Your company also has its own challenges, but overcoming them is possible. This is the DAVIS Way of approaching dilemmas, and we wish to share this point of view with you.

Reach your staffing goals through DAVIS Companies’ list of services. We provide contract, contract-to-hire, and direct-hire employment. We can assist you with a managed services program, recruitment process outsourcing, and human resources outsourcing, with on-site and payroll solutions to boot. We’ve been practicing the DAVIS Way since 1985. Believe you are in good hands with us.

Celebrate victory through the DAVIS Way. Contact us now.

 

References

1 Daugherty, Greg. “Women Still Earn Less than Men for Comparable Work in 2022 America.” Investopedia. https://www.investopedia.com/history-gender-wage-gap-america-5074898 . No publish date. Updated last May 25, 2022. Accessed last February 24, 2023.

2 American Association of University Women. “Equal Pay Day Calendar.” https://www.aauw.org/resources/article/equal-pay-day-calendar/. No publish date. Accessed last February 24, 2023.

3 Blount, Linda. “Fair for All or Fair for None: As White Women Close Wage Gaps, Black Women Fall Further Behind.” USA Today. https://www.usatoday.com/story/opinion/voices/2022/10/08/equal-pay-black-women-wage-gap-widening/8072068001/. Published last October 8, 2022. Accessed last February 24, 2023.

4 The Adecco Group. “Women of Color Suffer the Biggest Pay Gap in Technology, Hired Report Shows.” https://www.adeccogroup.com/future-of-work/latest-insights/women-of-color-suffer-the-biggest-pay-gap-in-technology-hired-report-shows/. Published last May 27, 2021. Accessed last February 24, 2023.

5 Park, Jeong. “Women and People of Color Lose Thousands Because of Pay Gap.” Governing. https://www.governing.com/work/women-and-people-of-color-lose-thousands-because-of-pay-gap. Published last October 21, 2021. Accessed last February 24, 2023.