Pay Equity

Summary Definition: The concept that employees doing the same work should receive the same compensation regardless of their demographics.

What is Pay Equity?

Pay equity is the principle that employees should be paid equally for doing equal work, regardless of their gender, race, ethnicity, or other protected characteristics.

The term is mostly synonomous with "pay equality," but it carries a broader implication of an organization's policies for addressing wage discrimination anytime in the employee lifecycle.

The legal principles for pay equality/equity start with the Equal Pay Act (EPA), which specifically refers to equal pay for equal work regardless of sex.

It doesn’t, however, legally require identical pay for two employees if there are legitimate differences between them, such as experience levels, organizational tenure, formal education, or prior job performance. In other words, if two employees do the same amount and kind of work, they should get paid the same compensation, regardless of their demographics.


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