The AAUW updated their report -- The Simple Truth About the Gender Pay Gap -- to illustrate the current state of the gender pay gap. The findings are sobering. The current average ratio of women’s earnings to men’s earnings is 80 percent, and the rate at which it is improving is uninspiring. The gender pay gap significantly narrowed after the 1970s, when women saw an increase in education and workforce presence and men saw a decline in their wage growth, but the last significant annual change in the ratio occurred ten years ago in 2007, and the current growth has stalled to tenths of a percent. According to IWPR, women should not expect to see equal wages until 2059. And, this doesn’t take race into account that shows that African-American women will not have equal pay until 2124, and Hispanic women will not have it until 2248.

But beyond the gender pay gap; inequality in the workplace creates a number of other problems for companies and employees.

How the gender pay gap can create problems in the workplace

There are a number of claims that could arise as a result of wage inequality in the workplace, with the most obvious being pay discrimination claims.  On a less obvious note, the gender pay gap can lead to changes in the work environment, including a decrease in satisfaction (and retention) from female employees and a discriminatory attitude in other areas that could lead to other types of discrimination claims.

What companies can do

President Trump signed an executive order revoking the 2014 Fair Pay and Safe Workplaces order, eliminating the mandate on paycheck transparency that previously worked to ensure that men and women were receiving equal pay opportunities. It’s important for all employees to understand how your company makes its salary decisions to promoting equality.

  • Be transparent, not just in terms of how each employee is compensated but also in your decision-making process when determining how employees receive raises or promotions.
  • Regularly assess to make sure that there is no implicit discrimination in how everything is executed.
  • Keep regularly updated records of payment classifications and compensation patterns, and perform routine salary audits in order to ensure that the distribution of wages amongst employees is consistent and fair.
  • Regularly perform a pay equity analysis to ascertain that compensation is based on objective factors.
  • Perform a detailed assessment on your company’s job descriptions to provide a more objective way of determining how different positions should be compensated.

Protect your employees and your business. Contact your HUB broker today to learn more about Employee Practices Liability insurance and other coverage.