Advancing Pay Equity on Equal Pay Day
Today, the Office of Federal Contract Compliance Programs observes Equal Pay Day, which marks on average how far into the year women must work to be paid what men were paid the preceding year. We are committed to removing barriers to opportunity, including pay discrimination and occupational segregation, which are key drivers of persistent pay disparities. Even before the COVID-19 pandemic, women faced significant gender and racial wage gaps driven by a number of factors, including a lack of transparency around pay decisions; discrimination and stereotypes impacting pay and promotions; and a lack of oversight and proactive analysis of pay practices. In addition, hiring barriers, steering, assignment patterns, and occupational segregation all contribute to systemic pay disparities. Women are overrepresented in low paid jobs that often lack critical benefits and are underrepresented in high paying jobs. And despite overall increases in participation rates for women in higher-paid occupations, women continue to face deeply entrenched barriers to accessing higher-paying jobs in nontraditional occupations and at managerial levels.
To take action, we issued Directive 2022-01, Pay Equity Audits, concerning federal contractors’ obligation to conduct an annual in-depth analysis of their compensation practices to determine whether there are pay disparities based on gender, race and/or ethnicity, and to correct problem areas. Conducting this pay equity audit is an essential step for contractors to identify barriers to pay equity and develop action-oriented programs to address these problems. In addition to examining pay disparities across similarly situated employees, the agency will also look broadly at a contractor’s workforce (across job titles, levels, roles, positions, and functions) to identify patterns of segregation by race, ethnicity, and gender, which may result from assignment, placement, or promotion barriers that drive pay disparities. If our initial review reveals disparities in pay or other concerns about the contractor’s compensation practices, we may request additional information, including the contractor’s pay equity audit, to investigate the contractor’s compliance. We look forward to working with the contractor community to tackle longstanding pay inequality through unbiased pay setting practices, greater proactive analysis of compensation systems, and transparency in providing to OFCCP the pay equity audits conducted to comply with OFCCP regulations.
Significant gender pay gaps persist almost 60 years after the passage of the Equal Pay Act of 1963, the Civil Rights Act of 1964, and Executive Order 11246 in 1965. Women in the United States who work full time, year-round typically are paid only 83 cents for every dollar paid to men. The wage gap is even more pronounced for many women of color. Today, the Department of Labor’s Women’s Bureau released “Bearing the Cost: How Overrepresentation in Undervalued Jobs Disadvantaged Women During the Pandemic,” a report detailing how women, especially women of color, were impacted by the COVID-19 economic crisis and the role of occupational segregation.
The gender wage gap has implications for the economic security of women and the families that depend on their earnings: in 2020 nearly two-in-three Black mothers (65.9%) and nearly four-in-ten Hispanic mothers (39.3%) were the equal, primary, or sole earners for their families, meaning they were either unmarried working mothers or married mothers earning as much or more than their husbands.
The pandemic exacerbated challenges faced by working women. Industries in which women – and particularly women of color – were overrepresented were hit hard by job losses. Many women were forced to leave the labor force or drop to part-time work, due to increased caregiving responsibilities as our care infrastructure collapsed, as well as other challenges. Even as the economy recovers and unemployment improves, women have had a slower return to the labor force, with Black women still experiencing the highest levels of unemployment. Women seeking to re-enter the workforce will face barriers due to periods of unemployment, loss of seniority and advancement opportunities, and access to education and training.
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