Pay Equity
Also known as: Equal pay
Pay equity is the principle that people doing the same or substantially similar work should be paid the same, with differences justified only by legitimate factors such as experience, performance, or location — not by gender, race, or other protected characteristics. It is measured through pay-equity analysis, which examines compensation across comparable roles to identify and correct gaps that cannot be explained by objective factors.
In the United States, pay equity is underpinned by the Equal Pay Act of 1963 and Title VII of the Civil Rights Act, and reinforced by state laws that increasingly restrict practices such as asking candidates about salary history, which can perpetuate past inequities. Pay equity is closely linked to pay transparency: publishing ranges and defining clear bands makes disparities visible and pushes employers to address them proactively rather than reactively.
The principle of equal pay is not US-specific, though its enforcement varies. India embeds equal pay for equal work through constitutional principle and the Code on Wages, which prohibits gender-based discrimination in wages for the same or similar work. For GCCs, disciplined compensation benchmarking and consistent salary bands are what make pay equity auditable — allowing leaders to defend pay decisions on objective grounds and satisfy both a US parent’s equity commitments and Indian statutory requirements.
Frequently asked questions
What is pay equity?
Pay equity is the principle that employees should receive equal pay for equal or comparable work regardless of gender, race, or other protected characteristics. Legitimate differences based on experience, performance, or location are permitted; unexplained gaps are not.
What is the difference between pay equity and pay transparency?
Pay equity is the principle of paying people fairly for comparable work, while pay transparency is the practice of openly sharing pay information such as salary ranges. Transparency is one of the tools used to expose and correct pay-equity gaps.
What US laws support pay equity?
In the US, pay equity is supported by the Equal Pay Act of 1963 and Title VII of the Civil Rights Act, along with state laws that increasingly ban asking candidates about salary history. Together they aim to ensure equal pay for equal work.
Is pay equity required in India?
Yes, in principle. India embeds equal pay for equal work through constitutional principle and the Code on Wages, which prohibits gender-based wage discrimination for the same or similar work, even though the enforcement framework differs from that in the US.