A recent study by the International Labor Organization looks at gender inequality and shows how pay transparency can promote fair wages.
Women are still paid 82 cents for every dollar men earn.
The gender pay gap has only worsened since COVID-19 as many women join the Great layoffbecame the actual carers and educators in their families, or were relegated to lower paid work.
“The World Economic Forum now expects it to take more than 130 years to close the gender gap globally, up from about 100 years before the pandemic,” Gita Gopinath, the IMF’s first deputy director, said in a speech at the Korea Gender Equality Forum in September 2022.
A recent study by the International Labor Organization, Wage transparency legislation: implications for employers’ and employees’ organisationsoffers a solution for the pay gap between men and women: pay transparency.
Why pay transparency?
When employees are in the dark about what their colleagues are earning, it means they are missing information that might be needed to know their own worth at work, which is essential in negotiating better salaries and fighting pay discrimination. Employers can also benefit from pay transparency because they can more easily prevent and address this type of discrimination before it becomes a problem, and it increases confidencewhich is net positive for everyone.
TO SEE: The COVID-19 gender gap: why women are leaving their jobs and how to get back to work. (free pdf) (TechRepublic)
Pay transparency can also have economic benefits for employers. According to the ILO report, correcting the gender pay gap “may result in an increase in women’s employment rates and working hours (as incentives are stronger the higher wages).” It can also lead to ‘better use of women’s skills and increased productivity’.
A lack of wage transparency can keep women and minorities working for lower wages than their male cohorts. A March 2022 Survey on job site Glassdoor showed that 85% of working women believe they deserve a raise.
Knowing what their co-workers earn could help these women claim compensation for what they’re worth, and the survey found that while 63% of employees would like their company to disclose pay information, only 19% said their company actually does this.
Asking colleagues about pay is also a tricky business, as the survey found that less than half of working women (45%) felt comfortable disclosing their pay to a colleague. Even fewer, 29%, had actually made the switch. Discouragingly, more than a quarter of employees (28%) reported that their company discouraged the practice.
How can payment transparency legislation help?
According to the ILO, countries can use a variety of approaches to resolve the gender gap – from periodic pay disclosures to pay audits to access to pay data. The organization proposes that governments also get involved and work with organizations on behalf of employees in making legislation to promote wage transparency.
The ILO report offers several ways that payroll transparency legislation is currently being offered:
- Enabling employees to request and access information about wage levels in their company
- Require employers to disclose individual wage information to employees
- Require employers to disclose the salary of an advertised position to prospective employees, either during the application process or in job postings
- Prohibit employers from requesting an employee’s or prospective employee’s salary history
- Establish an independent body to provide employers with equal pay certification if they meet certain gender-neutral pay requirements
- Require companies with a certain minimum number of employees to publish gender and pay information within their organization
- Conduct regular audits on gender and pay in companies with a minimum threshold of employees
- Conduct regular wage surveys in companies involving employee representatives
- Fostering the discussion on equal pay and wage audits during collective bargaining
According to Glassdoor career expert Alison Sullivan in a previous TechRepublic article: “Greater pay transparency is a crucial instrument to close the pay gap. It is imperative that both workers and employers not only destigmatize the wage taboo, but actively encourage and participate in wage discussions.”
These are “early days for wage transparency,” said Manuela Tomei, director of the ILO’s Working Conditions and Equality Department. “We see that countries are pursuing different approaches to promote this, showing that there is no ‘one-size-fits-all’ solution.”
