Activity SJa2.4

Objective

Equity + Inclusion in the Workplace

Concept

Social Equity + Justice

Activity Type

Impact

Rating System Application

B+I:D B+I:O O+M:D O+M:O

Mark eligible 1 · 5 · 8 · 10

Owner must ensure equal remuneration, regardless of gender, for work of equal value

Scope

The Owner shall ensure fair pay policies such that everyone on the team, irrespective of their gender, shall receive the same salary or wage if they are doing work of equal value. In other words, if two people are performing the same tasks with the same level of skill, expertise, and effort, they should be compensated equally. This responsibility promotes a culture of equality and discourages any forms of pay discrimination in the project.

Requirements

Act to Avoid Harm

01.

A gender wage gap analysis for equal work across all work types assigned to the project.
02.

Remediation of the identified gender wage gap, for all Owner employees assigned to the project, for equal work by adjusting remuneration, which includes compensation, benefits, and/or promotion.
03.

A regular monitoring program to evaluate wage gaps through self-assessment and public reporting, and/or consistent third-party audits, at an interval not longer than once per year, for all employees assigned to the project.

Indicators

The performance indicator is the percentage of the gender wage gap after all remediation efforts are complete. The first context indicator is the total number of female-identifying and nonbinary employees on the project who had wages remediated, which will be used to assess impact. The second context indicator is the percentage of the gender wage gap that was remediated.

Step 1

To calculate the performance indicator:

Determine whether employees are doing equal work (see Guidance).
Calculate the mean (average) pay for female-identifying and nonbinary employees doing each work type by adding all female-identifying and nonbinary employees’ gross pay amounts and dividing by the number of female-identifying and nonbinary employees.
Calculate the mean pay for male employees doing each work type by adding all male employees’ gross pay amounts and dividing by the number of male employees.
Calculate the combined mean* for female-identifying and nonbinary employees’ pay across all work types
Calculate the combined mean* for Male employees’ pay across all work types.
Subtract the female-identifying and nonbinary employees’ combined mean pay from the male employees’ combined mean pay.
Divide that result by the male employees’ combined mean pay and multiply by 100.

Step 1: Calculate for each work type

FN = (w1(x1) + w2(x2) + … / w1 + w2 + …)

Step 2

Step 2: Calculate for each work type

M = (w1(x1) + w2(x2) + … / w1 + w2 + …)

Step 3

P1 = (M - FN / M) x 100

Step 4

Continue for as many work types as are in the study.

* A combined mean is simply a weighted mean, where the weights are the size of each group.

To calculate the context indicator:

Once pay adjustments are complete, recalculate the gender pay gap.
Calculate the percentage of the original wage gap that has been remediated.

This is expressed mathematically as:

P = ((P1 – P2) / P2) x 100

Scoring

Outcome threshold

The outcome threshold for this Activity is that the average equal work gender pay gap after pay adjustments (P2 above) shall not exceed 3%⁸⁶. This represents ‘acting to avoid harm’. By supporting all employees receiving equal pay for equal work regardless of their gender, the project is progressing towards equitable development.

Points assignment

Points	Percentage Gender Wage Gap
2 points	5.1 - 10% gender wage gap
4 points	3.1 - 5% gender wage gap
6 points	.1 - 3% gender wage gap
8 points	0% gender wage gap

Additional points assignment

Points	Additional Requirements
+2 points	Requirement #3 satisfied

Documentation

01.

List of financial, human, and material resources utilized for this activity.
02.

Third-party gender wage gap audit report performed that states the gender wage gap as a percentage. Audit reports should not disclose employee/worker data or information and should state only the method used to collect data, the calculation of the percentage, and the percentage wage gap.
03.

Verification of commitment to undergo regular audits at an interval not longer than once per year.

Guidance

On additional collection of performance indicators

Indicators necessary to report in the UNRISD Sustainable Development Performance Indicators, Tier 2. B. Socioeconomic area, II.B.6 Gender pay gap: Equality of remuneration are:

Overall gender pay gap at the organizational level
Gender pay gaps at each occupational level

On types of equal work ⁸⁷

There are three kinds of equal work:

like work is the same or broadly similar. It involves similar tasks that require similar knowledge and skills, and any differences in the work are not of practical importance.
work rated as equivalent has been rated under a valid job evaluation scheme as being of equal value in terms of how demanding it is.
work of equal value is not similar and has not been rated as equivalent but is of equal value in terms of demands such as effort, skill, and decision-making.

On justifying pay differences ⁸⁸

“If a woman proves that she is doing equal work to a man, there is a legal presumption that any difference in their pay is because of their sex unless the employer can show that a ‘material factor’ explains the difference. A material factor must:

be a genuine reason for the difference in pay
cause the difference in pay
be significant and relevant
explain the pay difference with ‘particularity’ - this means the employer must be able to show how each factor was assessed and how it applied in the woman’s specific case
not be tainted by direct or indirect sex discrimination

Learn more about material factors and equal pay claims at: https://www.equalityhumanrights.com/guidance/equal-pay

On closing the gender pay gap ⁸⁹

For companies seeking to enhance gender diversity across their organization, it is important to take stock of gender inequalities, including gender pay gaps, which may be part of their organizational culture. Enterprises can take numerous measures to help close the gender pay gap in their organization. As a first step, recognition of the business benefits of improved gender diversity at all levels is critical as well as commitment from top leadership. More specific approaches to narrowing the pay gap include:

Promoting a gender-inclusive business culture while adopting a holistic approach to equal remuneration for self-identifying female, nonbinary employees and men for work of equal value.
Making equitable salary offers to men, self-identifying female, and nonbinary employees.
Basing pay on the position itself rather than previous pay of the employee as the latter perpetuates the gender pay gap.
Undertaking a gender pay review in the enterprise to assess whether there is a gender pay gap and to what extent.
Making jobs more flexible so that more self-identifying female and nonbinary employees access higher-level jobs and, therefore, higher pay.
Ensuring that unconscious gender bias does not affect performance reviews by relying on objective vs subjective criteria.
Selecting and applying a job evaluation methodology to assess the skills and responsibilities of the various jobs in the enterprise with a view to adjust job titles, contents, and corresponding pay overtime.

Additional Resources

Equality and Human Rights Commission’s Equal Value Estimator – assists in determining whether jobs are equal in value
Equality and Human Rights Commission’s Sample Collecting and Comparing Pay Info spreadsheet – assists in collection and comparison of pay information across jobs and gender characteristics

Referenced Source

UN Universal Declaration of Human Rights (1948), Article 2
UN Universal Declaration of Human Rights (1948), Article 23
ILO's Declaration on Fundamental Principles and Rights at Work
ILO, Equal Remuneration Convention, 1951 (No. 100)
ISO 30415:2021, Human resource management – Diversity and inclusion