CASE STUDY

How to Ensure Pay Equity in the Public Sector

Pay equity remains an area for improvement in both the private and public sectors. According to Pew Research Center’s analysis of median hourly earnings in 2020, women earned 16% less than men. The situation is even bleaker for women of color. Black women are paid 61 cents for every dollar paid to a man. Native American women are paid 58 cents for every dollar paid to a man and Latina women only 53 cents.

While strides have been made to narrow the wage gap, we are still falling short, especially when it comes to women of color. How can we address the gender pay gap in the public sector?

What is Pay Equity?

Simply put, pay equity is equal pay for work of equal value, based on levels of skill, education, effort, responsibility and working conditions. It seeks to eliminate pay discrimination based on race and gender.

Why Pay Equity Matters and Must Be Improved

Over the course of a 40-year career, a woman could lose as much as $406,760 in wages due to the gender pay gap. This means she will retire with fewer savings or be forced to remain in the workforce for longer — up to 10 years longer than her male counterparts.

The pay equity gap affects a woman’s economic status and family circumstances, especially if she is a single mother. Approximately one in eight women in the United States lives in poverty. Closing the wage gap would help to break this cycle of poverty, especially for women of color who earn the lowest salaries.

How Can We Improve Pay Equity in the Public Sector?

When the civil service system was created, it was dominated by white males. Few women and people of color had access to jobs in the public sector. The good news is, that picture has changed. The U.S. Government Accountability Office reports that male and female civil servants now have, on average, the same years of federal experience.

While it is encouraging to see the public sector employing higher numbers of women, it’s disappointing that we still haven’t achieved full pay equity in government. How can we redress the public sector pay gap and balance the salary scale?

1.  Review HR and Remuneration Policies

Some public sector organizations still follow remuneration systems based on outdated job classifications and salary grades. There is often little room to increase an employee’s pay within those classifications.

It may be time to revise your organization’s HR and remuneration policies. Start by conducting a compensation audit to identify unfair practices that may be limiting earnings for women. USAID, for instance, is making policy changes that will deemphasize the use of salary history in determining pay rates for contractors.

Using salary histories often perpetuates gender pay inequality. Women are more likely to move in and out of the workforce to raise families or care for aging parents. Using a female applicant’s last salary as a benchmark is likely to result in a salary offer that is well below market value when she reenters the workforce.

Compensation should instead focus on the scope of the job, education, level of skill, experience and the value the candidate brings to the organization.

2. Improve Compensatory Transparency

When there is no accountability, there is no incentive for change. At the federal level, we can benefit from stronger compensatory legislation. Countries like Canada, France, Switzerland, Sweden and Denmark all have pay transparency mandates and the United Kingdom is also taking steps towards similar legislation.

At the local level, publishing diversity reports each year holds you accountable for the progress, or lack thereof, towards achieving pay equity in your organization. You should also be transparent with your employees, but without infringing on employees’ right to keep their salary information private. You can do this by:

  • Being transparent about salary bands per job class.
  • Providing explanations to workers on why they fall within a lower salary band.
  • If there is no valid reason for a glaring pay discrepancy, discuss the steps that will be taken to address this.

3.  Create a Culture of Equity

Compensation transparency has another benefit — it helps build a culture of equity within your organization. Employees are often apprehensive about questioning their salaries and asking for pay increases. Being open and honest helps employees feel comfortable broaching this sensitive subject.

Diversity training is another way to encourage a culture of equity. Many people harbor unconscious gender or race biases which they unknowingly project in the workplace. Diversity training can help bring awareness to these biases and dispel them. When employees know that issues like diversity and pay equity are a priority, it increases their trust in the organization’s leadership.

Fair pay for all should not just be lip service. Despite the Equal Pay Act being in place since 1963, change has been slow. It’s time to step up our efforts towards closing the gender pay gap in the public sector.

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Jessica Pascual

Senior human resources (HR) leader with over 15 years of experience in development and implementation of programs and policies to achieve strategic human resources and management goals within highly technical, specialized, and regulatory environments. Recognized as a hands-on leader with outstanding leadership, interpersonal, communication, and relationship-building skills.

About CPS HR Consulting

CPS HR Consulting is a self-supporting public agency providing a full range of integrated HR solutions to government and nonprofit clients across the country.  Our strategic approach to increasing the effectiveness of human resources results in improved organizational performance for our clients.  We have a deep expertise and unmatched perspective in guiding our clients in the areas of organizational strategy, recruitment and selection, classification and compensation, and training and development.