Equal Pay Day in general highlights the pay disparity between men and women. It changes not just year to year, but country to country and even by race and other factors.
In the US, Equal Pay Day falls on the day in the year when a woman would have finally caught up with her male contemporary’s wages from the previous year. Other countries calculate it a little differently. (see sidebar).
Meanwhile, the European Commission marks Nov. 10 as the symbolic day to raise awareness that female workers in Europe still earn on average 14.1% hourly less than their male colleagues. Twelve EU countries (Austria, Belgium, Cyprus, Czechia, Germany, Estonia, France, the Netherlands, Slovakia, Portugal, Spain and Sweden) organize an Equal Pay Day according to the respective pay gap in their country.
However the gap is measured on the calendar, it doesn’t seem to have made much difference to the average woman, and the past year has jeopardized any gains in recent years with women leaving the workforce during the pandemic at a rate four times higher than men.
Equal Pay Day
The US Equal Pay Day is based on how far into the new year a woman must continue to work to make as much as a man had made in the previous calendar year. So, the average woman has to work from Jan. 1, 2020, to March 24, 2021, to earn what the average man made in calendar 2020 — nearly three additional months’ work to earn the same as a man. The March 24 date reflects the fact that in more than 90% of occupations, US women still earn less than men: 82 cents on the dollar on average. The date is much different when you break it down by ethnicity or other status (Black women: Aug. 3; mothers: May 5).
The European countries do the comparison a little differently. In the UK, for example, Equal Pay Day is the day in the year when women effectively, on average, stop earning relative to men, according to the Fawcett Society, which campaigns for gender equality and women’s rights at work, at home and in public life. In 2020, that day was calculated to be on Nov. 20. What it means: After Nov. 20, women are effectively working for free while men continue to be paid.
Meanwhile, lawmakers are increasingly responding to the need to close the gender pay gap.
United States. California leads the way in the US, as is often the case, with the first employee pay data reporting law. Effective Jan. 1, SB 973 requires private employers with 100 or more employees to report employee pay data to the Department of Fair Employment and Housing (DFEH) by March 31, 2021, and annually thereafter, for specified job categories by gender, race and ethnicity.
The report must include specified information, including the number of employees by race, ethnicity, and sex for 10 job categories established by creating a “snapshot” that counts all individuals in each job category by race, ethnicity and sex employed during a single pay period of the employer’s choice between Oct. 1 and Dec. 31 of the “reporting year.” The job categories include: executive or senior-level officials and managers; first or midlevel officials and managers; professionals; technicians; sales workers; administrative support workers; craft workers; operatives; laborers and helpers; and service workers.
The Biden administration is also leading the way on equal pay with the US Department of Labor’s Women’s Bureau website declaring that “Now is the time to address equity in wages. This means increasing pay transparency, disrupting occupational segregation, eliminating discrimination, increasing access to paid leave, child and elder care, and adding good jobs and women in those jobs to build the economy we all need to thrive.”
On April 15, the Paycheck Fairness Act passed the House of Representatives. President Biden supports the bill, which includes the Pay Equality for All Act and removes loopholes in the law allowing employers to justify gender pay disparities. If passed by the Senate, it would increase penalties for violations of a federal law that already prohibits wage discrimination on the basis of sex, enhance prohibitions to prevent retaliation against workers who lodge a discrimination complaint and bans contracts that block employees from sharing their salaries. However, the bill faces an evenly divided Senate, where Republicans have previously blocked similar legislation.
In Europe, the EU Commission has proposed a directive that would reinforce the entitlement to equal pay for men and women for the same work, or work of equal value, across the 27 member state countries of the European Union. It would give employees the right to comparative pay information and require gender pay gap reporting for employers with 250-plus employees, among other measures. Some EU member states already have aspects of these rules, while others do not, meaning that the rules could be a significant additional compliance burden for some organizations. The rules, if adopted, would be unlikely to come into force before late 2024.
Even countries in the Middle East, the United Arab Emirates (UAE), Saudi Arabia, Bahrain and Qatar, not known for their positive attitudes toward gender equality, have recently updated their discrimination legislation. The updated laws prohibit discrimination, whether in pay or otherwise, between male and female employees who carry out the same job; introduce paternity leave in the UAE; and grant female workers in Saudi Arabia further rights in the workplace (including working in hazardous workplaces and at night).
However, there is still a long way to go. At the current rate of progress, it will take more than 135 years to close the wage gap, according to the World Economic Forum’s 2021 Global Gender Gap Report. As the impact of the pandemic continues to be felt, the timeline to closing the global gender gap has increased by a generation from 99.5 years to 135.6 years.
Case study. In 2018, Iceland introduced the first policy in the world that requires companies and institutions with more than 25 employees to prove that they pay men and women equally for a job of equal value. The policy is implemented through a job evaluation tool called the Equal Wage Management Standard. If companies show they pay equally for the same positions, they receive certification. Beginning in 2020, certification became a requirement and companies without certification incur a daily fine. Iceland has held the top spot in the World Economic Forum’s Global Gender Gap Index for 12 years in a row.
Legislation will help to force employers to address the issue, but the World Economic Forum’s recommendations go further, including investment in the care sector and equitable access to care leave for men and women; policies and practices that proactively focus on overcoming occupational segregation by gender; and, effective midcareer reskilling policies, combined with managerial practices, which embed sound, unbiased hiring and promotion practices.
Unless governments, employers and society at large addresses the problem, Equal Pay Day will be “celebrated” well into the next century. According to a McKinsey Global Institute report published in 2016, it is not only good for society but closing the wage gap could add $2.1 trillion to the US economy, which would provide a welcome boost post-Covid.