This paper aspires to review key issues, policy mechanisms and international evidence with respect to closing the gender pay gap. 100), and the OECD Recommendation on Gender Equality in Education, Employment and Entrepreneurship. These policies typically target firms with at least 30-50 employees. For an overview of this work, see www.oecd.org/gender. Access to this content in this format requires a current subscription or a prior purchase. Mind The Gap: Number Of Workers Covered By Pay Available at https://data.oecd.org/earnwage/gender-wage-gap.htm. Its really an exercise in transparency, Lamb said of the disclosures. A range of public measures and societal, educational, and labour market transformations over generations have done little to close the gender wage gap around the world. Pay Gap They also can help facilitate calculations as part of pay reporting and auditing processes, and can help in pay equity cases though they do little to reduce gender wage gaps caused by horizontal segregation. The pay gap between women and men has long stood in the way of gender equality Many factors drive the wage gap between women and men, but there are few All of these pay transparency measures can function at least as well as a right to request a comparators pay but only if they are designed and implemented well. Getty Images Although salary is still considered a taboo topic in many workplaces, new data released by PayScale show that openly sharing employee salaries Opinion: Are you satisfied with your salary? Pay transparency This brief outlines and explains the different 6. [5] Blundell,J. In all three instances the onus of identifying, raising, and rectifying (possibly discriminatory) pay inequity rests on the individual, which is a very large burden. A new report from PayScale.com In fact, only 4% of employees surveyed in companies with over200 employees had ever submitted a request to obtain pay information (Government of Germany (BMFSFJ), 2020[25]). This report assesses gender gaps across a broad range of social and economic variables, including labour force participation, indigenous status, informality, poverty, and earnings. #block-googletagmanagerfooter .field { padding-bottom:0 !important; } Can pay transparency policies close the gender wage gap? [12] OECD (2019), Part-time and Partly Equal: Gender and Work in the Netherlands, OECD Publishing, Paris, https://dx.doi.org/10.1787/204235cf-en. Its those companies that are being more transparent that are actually closing the gap. More than 25% of U.S. workers are covered under pay Several collective agreements include clauses related to pay In the UnitedStates, the Department of Labor and theU.S.Census Bureau recently jointly published a study using linked survey and administrative data to analyse and improve estimates of the gender wage gap within detailed occupations, while also accounting for gender differences in work experience2. The EUs new pay transparency directive wont close the gender pay gap by itself. Although several Nordic countries and Italy already had pay disclosure requirements in place when the EC Recommendation on Pay Transparency was announced, the Recommendation has been essential in spurring other EU member states into action. After all, if you want to close the gender wage gap you first have to have data. However this resulted in privacy violations, such as the bullying of children of low-income workers, and was found to have decreased life satisfaction among poorer individuals. Distribution of countries by the presence of regulations requiring private sector pay reporting, pay auditing, or related measures, OECDcountries, 2021, Gender wage gap at the median for full-time dependent employees, 2019 or latest available year, Gender wage gap for full-time dependent employees, selected countries, 1996 through latest available year, Gender wage gap for full-time dependent employees at median, bottom 10% and top 10% of earnings, 2018 or latest year available, Approval was partially successful, following selected items could not be processed due to error, South Georgia and the South Sandwich Islands, (Government of Germany (BMFSFJ), 2020[25]), (United Kingdom Government Equalities Office, 2018[28]), (European Commission (2014/124/EU), 2014[29]). It may also give workers a global perspective on how their employer treats women and men in the workplace. Here are the facts: In 2019, the median pay for women is 21% less than the median pay for men or, put another way, women earn only 79 cents for every dollar earned by a man. Prior to the 2021 implementation of their measures (Chapter4), the CanadianGovernment conducted early consultations with Statistics Canada, the Treasury Board Secretariat, the Canadian Human Rights Commission, and the OECD, as well as Australia and the UnitedKingdom, both of which had recently introduced pay reporting rules. Proponents of salary transparency say its a crucial piece to closing racial and gender wage gaps, which have barely budged in years. Pay transparency offers a relatively simple and intuitive way to identify and address gender wage gaps when they occur in a workplace. [11] OECD (2017), Dare to Share: Germanys Experience Promoting Equal Partnership in Families, OECD Publishing, Paris, https://dx.doi.org/10.1787/9789264259157-en. France, too, has taken a multipronged approach to widening awareness of its pay auditing system (Chapter4). Pay transparency pay Note: Values represent the difference between median earnings of men and women relative to median earnings of men. As part of their efforts to close gender wage gaps, many OECDcountries are implementing promising new pay transparency tools like employer pay gap reporting, equal pay audits, and job classification systems. The existence of these measures does not guarantee take up. Another major barrier is the enormous inequality that exists in the distribution of unpaid work hours (OECD Gender Data Portal, 2021[14]). While many countries may have penalties for firm non-compliance, in many instances it can be unclear whether these penalties are enforced or sufficient to act as a deterrent. However, in practice most audits will be carried out by firms of auditors licensed under the aforementioned Auditor Oversight Act. 2. pay transparency Pay transparency laws can help fix the wage gap - Vox Complying with reporting obligations, in the form of identifying and reporting wage gaps, is a crucial first step. (2019), Do Firms Respond to Gender Pay Gap Transparency?, [5] Blundell,J. [30] European Commission (2021), Peer Review on Reducing the gender pay gap through pay transparency: legislative measures and digital tools targeted at employers, https://ec.europa.eu/social/main.jsp?langId=en&catId=1047&furtherNews=yes&newsId=9924 (accessed on 8June2021). Now, 2 percent, compounded over the life of somebodys career, can really add up., The important thing to note is that companies are at different points in the journey. [8] Baker,M. etal. When the Equal Pay Act came out, the gap was $0.59. Best practice includes acknowledging that there is no homogenous woman, and understanding that factors such as sex, ethnicity, race and class intersect with one another and can lead to larger gaps in labour market outcomes based upon these features. Gender pay gap: Japan will make big companies disclose wage disparities. Encourage the more widespread use of intentionally gender-neutral job classification systems. Legislate to ensure the foundational concept of equal pay for work of equal value and help correct for the historical undervaluation of jobs typically held by women. 3. The pay gap between men and women has remained stubbornly present despite efforts to reduce it over the past few decades. Allow individual workers to request pay information on comparable workers. As part of their efforts to close gender wage gaps, many OECDcountries are implementing promising new pay transparency tools like employer pay gap reporting, equal pay audits, and job classification systems. (employees with) the exact same education, exact same background, timing in their job, etc? With a sample size of more than 1.6 million profiles, weve been able to determine that the gap is still at 2 percent. /*-->*/. The UK gender pay gap: Does firm size matter? - Jones - 2023 Not all countries have implemented wage transparency policies. 54/4, pp. In addition to auditing and salary transparency, companies can avoid perpetuating an existing gender wage gap. 1. Can pay transparency policies close the gender wage In 2019, the EC announced its intention to develop a proposal for binding pay transparency measures. gender pay gap Pay secrecy reinforces racial biases as well, and the pay gap is wider for black and Hispanic men and women, according to a recent report from the Bureau of Labor Statistics. Since the Pay Equity Act came into force in August 2021, the Government of Canada has been working to reduce the gender wage gap in federally regulated workplaces. New Virginia Pay Transparency Law - National Law Review The EC also provided guidance in this Recommendation on improving data collection and reporting around gender pay gaps and the occurrence of pay discrimination cases; called on member states to clarify the concept of work of equal value in their legislation; and encouraged the development and use of gender-neutral job evaluation and classification systems to prevent or identify and tackle possible pay discrimination based on gender-biased pay scales. Since the Pay Equity Act came into force in August 2021, the Government of Canada has been working to reduce the gender wage gap in federally regulated workplaces. gender pay gap could be reduced by 40% with broad pay transparency. Available at http://gaia.inegi.org.mx/atlas_genero/. When armed with the knowledge that they have been underpaid, a worker tends to have a limited number of options: do nothing, negotiate higher pay, or initiate a pay equity claim. Equal Pay Policies and the Gender Wage Gap: A The information collected for this report will also be used to fulfil the reporting requirements of 2013 OECD Recommendation of the Council on Gender Equality in Education, Employment and Entrepreneurship and the 2015 OECD Recommendation of the Council on Gender Equality in Public Life. The French auditing system has teeth in the form of inspections by the Ministry of Labour, Employment and Inclusion, which reports a consistent improvement in compliance since the latest auditing process went into effect in 2019. This report covers the 38 member states of the OECD, spanning from North and South America to Europe and Asia-Pacific (https://www.oecd.org/about/members-and-partners/). The pay gap has remained stubbornly high in Europe for decades, and is currently at 14.1%. [31] Perez-Truglia,R. (2019), Measuring the Value of Self- and Social-Image: Evidence from a Natural Experiment, SSRN Electronic Journal, http://dx.doi.org/10.2139/ssrn.2657808. Monday, June 15, 2020. Additionally, pay equity claims that go through the legal system tend to be costly, both in time and money. In sum, the comparator question remains a difficult, practical puzzle to solve when pay discrimination cases arise. 104/4, p.1091, http://dx.doi.org/10.1257/aer.104.4.1091. Governments in OECDcountries have begun innovating fairly recently with systemic pay transparency policies. This type of experimental research should be replicated elsewhere by countries trying to improve public understanding of gender wage gaps. To ensure wider reach, these in-person consultations were complemented by an online questionnaire for those unable to attend the sessions in person, as well as a platform for those who attended the sessions to provide further feedback. Austria offers an equal pay quality label, which is awarded to companies based on their efforts to promote gender equality within the enterprise. The planned three-year programme entails a best-practice-exchange and also talks for company representatives. Austria has online tools for both workers and employers. While some countries conduct awareness-raising and training campaigns, a more comprehensive approach that targets all affected actors, at different stages of policy design, will help ensure policy measures are effective (Box1.5).
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