Pay gap
What is the wage gap?
The gender pay gap is a measure of the gender pay gap in the labour market, usually expressed as the percentage by which women earn less than men. It is most often given in relation to the regular basic hourly wage, although it can also include other elements, such as supplementary components or bonuses. The median wage gap indicates how much lower the average salary of women is compared to men.
The value of the wage gap does not always mean discrimination. It may mostly result from differences in the type of contract, length of service, positions held or caring responsibilities, which are more often burdened by women. However, an unjustified wage gap, i.e. one that does not take into account objective criteria, is a manifestation of inequality and a violation of the principle of equal pay for equal work or work of equal value.
How do you calculate the pay gap?
To calculate the wage gap, the most common way is to compare the average salaries or median salaries of women and men, taking men’s salaries as a benchmark. A negative value means a situation in which women earn more, which is rare.
Wage gap regulation
Directive (EU) 2023/970 of the European Parliament and of the Council on pay transparency imposes new obligations on employers to provide pay information, report and analyse pay gaps and take corrective action if the pay gap is not objectively gender-neutral justified. In the case of employers subject to the reporting obligation, a joint salary assessment will be required, m.in, if the difference in the average level of remuneration between women and men in a given category of employees is at least 5%, is not justified by objective criteria and is not eliminated within the stipulated period. These responsibilities also include cooperating with workers’ representatives and transmitting certain data to the competent monitoring bodies and, in selected cases, to the labour inspectorate or equality body.
Workplace Pay Gap
In a given position, differences in salaries between women and men may result, among m.in, from a lack of salary transparency, mismatch in recruitment advertisements, differences in negotiations during an interview or decision-making bias. Employees performing work of equal value should receive the same pay, which is the basis of the principle of equal pay regardless of gender.
In practice, the pay gap affects employee productivity, working conditions and the sustainability of the organization. Wage inequality can lead to lower morale, increased turnover, and difficulty recruiting. Therefore, through remuneration transparency mechanisms and the analysis of wage data, it is possible to identify their causes and implement policies to close the gaps.
Benefits of closing the wage gap. Equality of women and men
Implementing gender equality and tackling the pay gap strengthens employer reputation, increases employee confidence and facilitates talent attraction. Pay equity is also of long-term importance: higher and fairly determined pay affects the contribution base, the amount of earnings-related benefits and future pensions. This is especially important in the case of women, who often accumulate lower pension capital due to lower salaries, breaks from work or part-time work.
Research, including one conducted by the Institute for Structural Research, confirms that organizations that promote equal pay perform better and are more resilient to crises. In the public sector, where salary data are more readily available, the wage gap is usually lower than in the private sector.
The wage gap is not only an ethical problem, but also an organizational and social challenge. Counteracting unjustified differences in pay between men and women is a legal obligation of employers, but it is also an element of a modern approach to management. The pay gap can be effectively reduced through pay transparency, the use of objective pay criteria, and consistent efforts to promote pay equity across the organization.
