Pay equity vs. pay equality: knowing the difference

by Natasha K. A. Wiebusch

Companies that excel in pay equity see higher profits, improved customer satisfaction and higher talent success rates, according to the Josh Bersin Company’s recent Definitive Guide to Pay Equity research. Unfortunately, despite the clear benefits, progress has been slow.

Today, the pay gap between men and women remains ever present…and stubborn. According to the 2023 gender pay gap data, the gender pay gap is 9.1%. This is only a .1% improvement from 2022.

But in the years since the pandemic, employees have seen a welcome change. That is, in the race to attract and retain talent, employers have renewed their commitments to eradicate pay inequity. Employers across the UK have implemented pay equity strategies to ensure not only gender pay equity, but also fair pay across other demographics.

A key piece of these strategies is understanding the difference between pay equity and pay equality. In this article, we explain what the difference is and why it’s important.

What is pay equality?

Pay equality is the concept of providing equal pay for equal work. It means employees should be paid the same amount for doing comparable work regardless of their sex, gender, race or other characteristics.

Pay equality is at the center of pay discrimination. That is, if an organisation is paying a man and a woman differently for like work, work that is rated as equivalent or work of equal value, they are likely violating the law.

Organisations can pay employees more based on practical differences, such as increased duties, level of responsibility or skills. However, all else being equal, pay discrepancies based on sex result in illegal unequal pay, leading to a significant risk for organisations.

What is pay equity?

Pay equity is the concept of ensuring equitable pay among all employees regardless of sex, gender, race or other characteristics. Pay equity practices seek to reduce disparities among employees of diverse backgrounds.

Unlike pay equality, pay equity is not solely focused on comparing pay among employees doing the same job. It also accounts for societal barriers, biases and stereotypes that contribute to disparities in pay.

For example, an organisation may experience pay inequity if it has an over-representation of women in lower paying job roles. Though there is no instance of pay discrimination, the unequal representation of women causes a gender pay disparity.

Want to know more? Read our blog to learn more about pay equity

Why knowing the difference is important

Understanding pay equity vs pay equality is important because it helps you shape a holistic pay equity strategy. If you understand the nuances of these terms, you can build a strategy that ensures equal pay and equitable opportunities and growth for all employees.

Creating a pay equity strategy also requires HR and other leaders to communicate efforts to the wider organisation. Here, it’s extremely important that communications are clear about what key terms, such pay equity, mean to the organisation.

For example, if you announce a pay equity initiative without more information, employees may believe this is limited to eliminating pay discrimination. With proper onboarding and explanation, employees can come to fully understand that pay equity involves more than pay equality.

Next steps: read our blog on How to achieve pay equity in the workplace.