The sphere of workplace equity includes a lot of terminology, some of it confusingly similar but highly nuanced. What is the definition of ‘pay equity’ vs. ‘pay gap’? How does ‘minimum wage’ compare to a ‘living wage’? What about acronyms such as DEI&B and ESG?
To help you get a handle on all of these terms, we’ve built a glossary of key workplace equity terms and their definitions below.
Adjusted pay gap
An adjusted pay gap (sometimes also called a “controlled pay gap”) measures the difference in earnings between two populations, after grouping employees into comparable groups and statistically accounting for measurable, neutral factors that may account for differences in compensation, such as tenure or management responsibilities.
DE&I / DEI&B
Diversity, equity, and inclusion (DE&I or DEI) or diversity, equity, inclusion, and belonging (DEI&B) sum up an organization’s policies, programs, practices, and culture that promote equitable levels of representation throughout an organization, provide fair outcomes for all employees, and ensure that every employees feels that they are equally supported and welcome to participate.
In the workplace, diversity means having a workforce composition that represents a range of demographics, characteristics, experiences, and perspectives.
In the U.S., private employers with 100 or more employees, federal contractors, and first-tier subcontractors with 50 or more employees, and financial institutions/government depositories with 50 employees or more are required to file annual EEO-1 reports with the U.S. Equal Employment Opportunity Commission (EEOC), with some exemptions. What to include in the report varies depending on whether an organization is a single-establishment or multi-establishment employer. All reports must include demographic data for all employees categorized by: race/ethnicity, sex, and job category.
U.S. Equal Employment Opportunity Commission (EEOC)
The U.S. EEOC is a federal agency established by the Civil Rights Act of 1964 to enforce federal laws that make it illegal to discriminate against job applicants or employees due to race, color, religion, sex, national origin, age, disability, or genetic information in all work situations, including hiring, firing, promotions, harassment, training, wages, and benefits.
Employee experience (EX)
The employee experience (EX) is what worker’s perceive about their interactions throughout the entire employment lifecycle within an organization, including: applying, interviewing, being hired, daily work experience, company culture, resources, feedback, recognition, promotions, and leaving the organization. A positive or negative EX can affect everything from engagement and productivity levels to absenteeism and retention rates. Workplace equity is increasingly becoming a critical component of successful EX.
Employee Resource Group (ERG)
Employee Resource Groups (ERGs) are voluntary, employee-led, employer-endorsed programs aligned around a common characteristic or interest to foster inclusion and belonging, provide personal and professional support to members, offer a safe forum for learning and sharing perspectives, and create a sponsored avenue for employees to innovate and solve challenges within their company and their community. Common ERGs are women’s groups, LGBTQ+ groups, environmental groups, and health and wellness groups.
The Equal Pay Act (EPA) of 1963
The Equal Pay Act is federal labor law that prohibits pay discrimination on the basis of gender, specific to substantially similar work performed at the same workplace under similar working conditions (i.e., “equal pay for equal work”). It provides for defenses of pay differences on the basis of seniority, merit, incentive, and shifts.
Equal Pay Day
Equal Pay Day symbolizes how far into a year the average woman must work to earn what the average man earned in the previous year as an illustration of the current state of the gender pay gap. In 2022, Equal Pay Day was March 15 because women earned only 83 cents for every dollar paid to men. However, it is more accurate to discuss an “Equal Pay Season” as it takes far longer into the year for Asian American, Native Hawaiian, and Pacific Islander women (May 3 for 2022), Black women (September 21 for 2022), Native American women (November 30 for 2022) and Latina women (December 8 for 2022) to “catch up” due to greater disadvantages and inequities.
‘Equal pay for equal work’
The phrase “equal pay for equal work” (i.e., pay equity) represents the concept of paying employees equally for performing equal, substantially similar, or comparable work, regardless of their gender, race, or other protected category characteristics.
Equitable compensation management
Equitable compensation management is the combination of a total rewards strategy, program design, and administration that provides rewards — pay and benefits — that are both externally competitive and internally fair. To achieve this, companies regularly conduct pay equity analyses, audit and test policies and practices for fairness, and govern pay decisions including starting pay and promotions. Pay Policy Analytics™, a component of Syndio’s leading Workplace Equity Platform, helps companies analyze, explain, and improve their pay policies to ensure they are working as intended to compensate employees fairly across the board.
Environmental, social, and governance (ESG) factors are increasingly used in investment analysis related to corporate responsibility and sustainability. More and more companies are disclosing ESG information, whether by mandate (e.g., Europe and other countries have ESG reporting requirements) or voluntarily in response to rising demand from investors, boards, employees, job seekers, and consumers. ‘S’ factors generally relate to how a company interacts with and impacts people, including employees, consumers, and communities. As a measure of both pay equity and opportunity equity outcomes, workplace equity metrics should be foundational to social impact reporting.
Fair Pay Workplace certification
Fair Pay Workplace is a nonprofit that validates companies after rigorous evaluation of their pay data and practices. Certified companies also have to commit to following a tailored action plan to support ongoing progress. To help standardize the way that companies measure pay and promote transparency, Fair Pay Workplace established and upholds a set of Rules & Standards built by an alliance of experts to ensure that when companies claim achievement of pay equity, they are backed by sound methodologies and accepted best practices.
Gender pay gap / gender wage gap
The gender pay gap (also known as the “gender wage gap”) is a measure of overall differences in mean or median earnings between men as a group and women as a group, within a population. The Q1 2022 national gender pay gap in the United States shows that women earn only 83 cents for every $1 men earn. There are four root causes of the gender pay gap.
Global pay equity analysis
A global pay equity analysis measures pay equity for a multi-country workforce. For global companies, there are many complexities to performing an “all-up” global pay equity analysis across different countries with different currencies, rules, historically disadvantaged groups, and reporting requirements. As such, companies take a mix of approaches, from multiple, siloed country-by-country analyses to global, cross-country groupings and modeling. Syndio’s Workplace Equity Platform and expert advisors help companies conduct a global pay equity analysis with flexible, tailored approaches that accommodate both within- and between-country analyses.
Lifetime pay gap
The lifetime pay gap refers to the total impact of earnings differentials between men and women over the course of a full career. If left unaddressed, pay inequities and pay gaps compound over time, creating large disparities in lifetime earnings and wealth accumulation for underrepresented groups. According to the National Women’s Law Center research on the lifetime wage gap, women lose $406,280 over the course of a 40-year career, while for Black women the lifetime earning losses are nearly a million ($964,400).
Lilly Ledbetter Fair Pay Act of 2009
In the U.S., the Lilly Ledbetter Fair Pay Act is a federal statute that amends Title VII of the Civil Rights Act of 1964 to extend the statute of limitations for pay discrimination claims, requiring that each new paycheck tainted by a prior discriminatory pay decision triggers a new filing period.
A living wage is the minimum income needed for a worker to afford basic needs and meet a decent standard of living for themself and their family with no additional income. The Global Living Wage Coalition defines a decent standard of living to include “food, water, housing, education, health care, transportation, clothing, and other essential needs including provision for unexpected events.” Living wage is not the same as the minimum wage; in many places, the minimum wage is insufficient to provide a living wage. You can determine the living wage for an area in the U.S. using MIT’s living wage calculator.
Median pay gap
The median pay gap is a measure of overall differences in median earnings between two populations by comparing the earnings of the middle employee for one group to the middle earner in another group. By treating the middle earner as “typical” and comparing the earnings, the median pay gap illustrates potential differences in earnings between groups at a company. Companies’ median pay gaps are driven by the same four root causes as society’s pay gaps.
The minimum wage is the lowest hourly wage that employers can legally pay their employees. In the U.S., the federal minimum wage is set in the Fair Labor Standards Act (FLSA).
A neutral factor in a pay equity analysis is a nondiscriminatory, job-related factor that can justifiably explain differences in workers’ compensation by relating it to differences in skill, tenure, efforts, accountability, and working conditions.
Companies with federal contracts must comply with the Office of Federal Contract Compliance Programs (OFCCP)'s Directive 2022-01, which means that the OFCCP will request complete copies of pay equity reviews conducted to comply with the Executive Order 11246 regulations. This creates a challenge for companies with federal contracts to comply with regulatory requirements while retaining attorney-client privilege and leaning into pay transparency. Syndio’s Workplace Equity Platform and expert advisors help companies simplify OFCCP compliance by conducting both privileged pay equity analyses and compliance-focused analyses simultaneously.
Opportunity gaps exist when certain groups have disproportionate access to career opportunities such as jobs, promotions, and other forms of advancement. They occur when groups such as women and people of color are hired and/or promoted at lower rates than their white, male counterparts. For example, while examining EEO-1 data from 2009-2018, Syndio’s research team found that white men in the U.S. are 9.2 times more likely to be in leadership positions than Black women, after controlling for qualified, available talent.
Opportunity equity means that employees have equivalent access to opportunities for employment, advancement, and development — regardless of gender, race, or other protected category factors. To improve opportunity equity, companies must analyze their recruiting, hiring, onboarding, and promotion policies and ensure they are consistently, objectively, fairly, and equitably enforced for all employees and job candidates.
Pay equity is compensating people performing equal, substantially similar, or comparable work in a way that is not based on workers’ gender or other protected category characteristic (like race or ethnicity), but instead may be explained by neutral, job-related factors that differentiate workers’ skills, effort, accountability and working conditions.
Pay equity analysis
A pay equity analysis is the statistical evaluation of compensation by groups of workers performing substantially similar work to rule out that the distribution of compensation for one group is different than that of another group, after adjusting for justifiable factors like experience, seniority, or location. In the U.S., pay equity is most commonly analyzed on the basis of gender and race or ethnicity, but it can be compared across any demographic including age, sexual orientation, disability, caregiving status, and more. Pay equity analyses were traditionally performed manually either in-house or with external law and consulting firms, but pay equity software has made the process much faster, more efficient, easier to scale, and secure.
Pay equity software
Pay equity software helps companies analyze, resolve, and prevent pay disparities. PayEQ®, the pay equity component of Syndio’s leading Workplace Equity Platform, uses best-in-class statistical analyses to identify pay disparities due to gender, race, or any other demographic and provide remediation recommendations to address them at key moments in a company’s compensation cycle.
Pay explainability is the ability to clearly articulate how your organization determines pay, how you apply pay policies to individual employees, and whether pay decisions are equitable and consistent. Organizations with high pay explainability have clear, transparent pay practices that HR leaders and managers can easily communicate and that employees can easily understand. When employees know how their pay is determined, how pay levels and increases are determined, and that their pay is equitable, it builds shared accountability and commitment, and fuels a culture of trust.
The pay gap (also known as the wage gap) is a measure of overall differences in mean or median earnings between two populations. For example, the gender pay gap is the difference between what men as a group earn on average vs. what women as a group earn on average, within a population. The gender pay gap may be “adjusted” when the gap accounts for differences between the types of jobs men and women perform (which often pay different rates), and based on differences in other measurable characteristics like tenure or years of experience. “The pay gap” usually refers to the median, unadjusted/uncontrolled pay gap. Pay gaps have root causes in both pay inequity and opportunity inequity.
Pay scale transparency
Companies that are transparent about their pay scales publicly disclose their salary ranges and wage scales. In the U.S., a growing number of states and jurisdictions are passing legislation that requires varying levels of pay scale transparency. The most progressive laws require companies to proactively disclose a reasonable pay range (minimum and maximum annual salary or hourly wage) in job postings, rather than just upon request to employees or job applicants as more reactive laws mandate. Some employers are starting to take a national approach to pay transparency, such as Microsoft, who announced in June 2022 that they will soon be posting salary ranges for all job openings. Another factor creating the new “era of pay transparency” is that employees themselves are sharing salary and wage information through Google spreadsheets, Reddit threats, TikTok, LinkedIn, and other sites.
A protected class or category is an employee attribute that is legally protected from employment discrimination. In the U.S., these include sex (including pregnancy, sexual orientation, and gender identity), race, religion, national origin, people over 40, and people with physical or mental disabilities.
Racial and ethnicity pay gap / racial and ethnicity wage gap
The racial and ethnicity pay gap (also known as the “racial and ethnicity wage gap”) is a measure of overall differences in mean or median earnings between different race and ethnicity groups within a population. The National Partnership for Women and Families stated that, in 2022, the pay gap for Latinas is widest (earning 49 cents on the dollar compared to white men), followed by Native American women at 50 cents and Black women at 58 cents.
Remediation / readjustment
Remediation or readjustment is the step in the pay equity analysis process during which employers adjust the pay of affected employees to bring compensation into alignment with equitable pay policies. Remediation planning often occurs ahead of merit cycle planning in order to budget for remediation amounts.
Representation in the workplace is similar to diversity in that it involves a workforce composition that represents a range of demographics, characteristics, experiences, and perspectives. However, while diversity generally refers to the overall makeup of a workforce, representation usually refers to diversity within roles and levels. Leadership and executive representation is an important metric that shows how much upward mobility underrepresented groups such as women and people of color have within a company and whether they “have a seat at the table.”
Asking for salary history is a potentially unfair job candidate screening and negotiation practice that can contribute to inequitable starting pay, leading to growing pay inequities over time. For some groups of employees, such as women and people of color, using prior pay to determine starting pay carries forward pay disparities from job to job, perpetuating any existing pay inequities. An increasing number of states and companies are banning the practice of asking job candidates for their current or most recent salary.
Salary range disclosure / wage scale disclosure
In the U.S., a growing number of states and jurisdictions are passing legislation that requires varying levels of transparency for salary ranges and wage scales.. The most progressive laws require companies to proactively disclose a reasonable pay range (minimum and maximum annual salary or hourly wage) in job postings, rather than just upon request to employees or job applicants as more reactive laws mandate. Some employers are starting to take a national approach to pay scale transparency, such as Microsoft, who announced in June 2022 that they will soon be posting salary ranges for all job openings.
SEC human capital disclosure
In 2020, the U.S. Securities and Exchange Commission (SEC) started requiring public companies to disclose information about their workforce beyond just the number of employees. These reporting requirements ramped up the SEC’s focus on the social (‘S’) factor of ESG, but did not include specific line items of metrics and information companies should share. Companies vary widely in what they currently include in human capital disclosures, which can range from DEI metrics, compensation and benefits, and pay equity to workplace health and safety, training, and job stability. More explicit guidelines are expected to be introduced soon.
Title VII of the 1964 Civil Rights Act
The Civil Rights Act of 1964 is a civil rights and labor law in the U.S. that prohibits discrimination based on race, color, religion, national origin and gender. Title VII of the Act specifically prohibits discrimation in all aspects of employment, including compensation, based on these protected categories.
Unadjusted pay gap
An unadjusted pay gap (sometimes also called an “uncontrolled pay gap”) measures the overall difference in mean or median earnings between two populations, without statistically accounting for factors based on measurable characteristics such as tenure or years of experience.
UK Gender Pay Gap Report
The United Kingdom requires employers with a headcount of 250 or more to report on their gender pay gap annually. Required data includes percentage of men and women in each hourly pay quartile, mean gender pay gap using hourly pay, median gender pay gap using hourly pay, percentage of men and women receiving bonus pay, mean gender pay gap using bonus pay, and median gender pay gap using bonus pay for relevant employees. It is recommended that companies include a supporting narrative to explain the reason for a gender pay gap and an action plan to demonstrate how the company plans to address the gender pay gap.
The wage gap (also known as the pay gap) is a measure of overall differences in mean or median earnings between two populations. For example, the gender wage gap is the difference between what men as a group earn on average vs. what women as a group earn on average, within a population.
Workplace equity means unlocking opportunities for every employee by treating them equitably and without bias at every stage of employment. This allows employees to achieve their highest potential within an organization, regardless of their gender, race, or other factors. Success in workplace equity is driven by two things: equal pay for equal work and equal access to opportunities. To get these right, companies must ensure they’re hiring, compensating, supporting, and advancing employees based on what they have to offer — not their identity.
Workplace Equity Platform
A Workplace Equity Platform provides a single, unified system that helps companies measure, analyze, improve, and report on all aspects of workplace equity progress — from reducing pay gaps to hiring, promoting, and retaining employees equitably. Syndio’s leading Workplace Equity Platform is purpose-built to help companies analyze, resolve, and prevent pay inequities more quickly and efficiently, as well as using analysis, benchmarks, and data visualizations to measure equity in opportunities and set realistic representation goals.
Making workplace equity progress
Syndio’s mission is to help companies prove that they value every employee for what they contribute to their company’s success. We have the technology and expertise to help your company tackle pay and opportunity inequities so you can show measurable progress and communicate effectively to employees, job seekers, investors, and the public. Want to see how it all works?