What is pay equity?

By Brightmine

Pay equity is where employees receive fair compensation regardless of their ethnicity, gender, or other characteristics. Organisations can use solutions like Brightmine Pay Equity Analytics to analyse pay equity across demographics.

Pay equity vs pay equality vs pay fairness: What’s the difference?

Pay equity, pay equality, and pay fairness are distinct concepts within the realm of compensation.

• Pay equity is where individuals in similar roles, with similar qualifications and experience, are compensated equally, regardless of gender, ethnicity, or other characteristics.
• Pay equality addresses pay differences between individuals or groups performing the same or similar work. Learn more in our guide: Pay equity vs. pay equality
• Pay fairness encompasses not only equal pay for equal work, but also the overall compensation structure and whether it is perceived as just and equitable by employees.

Want to know more? Read our blog on The difference between pay equity and pay equality

Who has a right to equal pay?

All men and women have the right to claim equal pay if they are doing equal work under their contract of employment.

What counts as equal work?

An employee can claim equal work under the following:

• Like work: tasks are the same or broadly similar
• Work rated as equivalent: a job evaluation study has rated it as equivalent
• Work of equal value: work requiring similar effort, skill and responsibility

Equal pay and other forms of discrimination

Employees are protected under the Equality Act 2010 from discrimination based on nine protected characteristics, including age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex and sexual orientation.

Employees, including workers and apprentices, must not be treated unfairly because of any of these characteristics, except in limited circumstances. For broader compliance support visit the Brightmine HR & Compliance Centre.

When might differences in pay be allowed?

Differences in pay may be justified, for example as a result of:

• Length of service
• Qualifications or skills
• Performance

Employers must be able to show that any pay gap is fair and not discriminatory.

Why is pay equity important?

Pay equity builds trust, strengthens reputation and improves engagement. Fair pay practices support diversity in higher-paid roles and contribute to business performance.

Why is pay equity good for business?

Pay equity boosts transparency, drives employee morale and attracts candidates. Review insights and related resources via the Brightmine pay equity hub.

How can employers implement or improve their pay equity policies or practices?

Employers should:

• Regularly review employment policies
• Conduct regular pay audits
• Ensure transparent and objective pay policies
• Limit managerial discretion
• Include salary ranges in job adverts

What are the best practices for pay equity/fair pay?

• Carry out regular pay audits
• Voluntarily report ethnicity pay gaps
• Train hiring managers to reduce bias

Read our blog on How to achieve pay equity in the workplace.

Benefits of pay equity software

Pay equity software like Brightmine Pay Equity Analytics, helps employers:

• Improve transparency and compliance
• Identify and address pay disparities
• Streamline and automate complex pay equity analysis

Achieving pay equity requires ongoing commitment, clear processes and data driven decision making. By understanding the difference between equal pay and broader pay equity, reviewing pay structures regularly and addressing the root causes of inequity, such as bias, inconsistent policies or unequal progression, organisations can create a more transparent and inclusive workplace.

Legal requirements like gender pay gap reporting, along with emerging expectations around ethnicity and disability pay reporting, further underscore the need for robust and fair pay practices.

Modern tools such as pay equity software enable employers to analyse data more effectively, comply with regulations and make meaningful progress toward eliminating pay gaps. Ultimately, organisations that prioritise pay equity are better positioned to build trust, attract diverse talent and support a culture where every employee can thrive.