What Does Equal Pay Day Mean to Your Business?

Equal Pay Day

Pay equity — the gap between men and women’s compensation — has been a hot topic in the news this year. According to the Institute for Women’s Policy Research, in 2014, female full-time workers made an average of 79 cents for every dollar earned by men — a wage gap of 21 percent. To draw attention to the problem of wage inequity, in 1996 the National Committee on Pay Equity (NCPE) launched Equal Pay Day. We just commemorated that day (April 12) which symbolized how far into 2016 women must work to earn what men earned in 2015.

Equal Pay Day

While Equal Pay Day has been around for 20 years, the wage gap has been around much longer. In fact, according to the IWPR, if change continues at the same slow pace as it has for the past 50 years, women won’t reach pay equity until 2059 — 44 years in the future.

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Women of color face an even greater wage gap than white women, and there is also a wage gap between the earnings of white men and minority men. As a small business owner, what can you do to help ensure everyone in your business is paid fairly? The NCPE offers this list of steps:

  1. Assess your recruitment practices. Do you actively look for diverse job candidates when hiring?
  2. Evaluate your compensation system. How do you determine salaries and benefits? Do you evaluate positions primarily held by women or minorities by the same standards as positions primarily held by white males?
  3. Consider industry competitiveness. Are your salaries and benefits at market rates for all employees, or are your female and minority employees paid below market rate?
  4. Put a new job evaluation system in place. Consider updating job descriptions for all positions and establishing uniform criteria for assessing and evaluating job duties.
  5. If women and/or minority employees get lower pay than white men for jobs with similar duties or job grades, is there a legitimate reason for that?
  6. Review information for new hires. Do men, women and minorities typically get hired at different levels in your company? For example, are most of your entry-level hires women and most of your senior hires men? Are new hires treated consistently with existing hires in terms of pay?
  7. Assess opportunities for commissions and/or bonuses. Do men, women and minority employees at similar levels have equal opportunity to obtain bonuses or commissions?
  8. Assess how raises are given. Is there a consistent method of evaluating performance for all workers? Are all employees with the same evaluation or score given the same percentage salary increases?
  9. Evaluate employee training and development opportunities. How do you choose employees to participate in training and development programs, both within and outside your company? Is the pool skewed towards white males?

It’s easy to get defensive about the concept of pay equity, but just because you discover wage inequity in your business doesn’t mean it’s intentional. Often, wage gaps are the result of historical biases and attitudes we may not even realize we have. That’s why it’s so important to take a good, hard look at your workplace. Instituting pay equity is good business sense — it helps your employees feel valued, and that helps you attract quality workers. Learn more about Equal Pay Day and conduct a Self-Audit at the NCPE website.

Equality Illustration via Shutterstock
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Rieva Lesonsky Rieva Lesonsky is a Columnist for Small Business Trends covering employment, retail trends and women in business. She is CEO of GrowBiz Media, a media company that helps entrepreneurs start and grow their businesses. Visit her blog, SmallBizDaily, to get the scoop on business trends and free TrendCast reports.

One Reaction
  1. Rieva,

    I’ve never understood the gap…between pay received by men vs. women.

    The pay needs to be equal. Period. Why is this still an issue?

    The Franchise King®