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Activity SJa2.5
Objective
Equity + Inclusion in the Workplace
Concept
Social Equity + Justice
Activity Type
Impact
Rating System Application
Owner must ensure equal remuneration for work of equal value regardless of diversity characteristics
Scope
The Owner shall ensure fair pay policies such that everyone on the team, irrespective of their diversity characteristics, shall receive the same salary or wage if they are doing work of equal value. In other words, if two people perform the same tasks with the same skill, expertise, and effort, they should be compensated equally. This responsibility promotes a culture of equality and discourages pay discrimination in the project.
Requirements
Act to Avoid Harm
- 01.
Diversity wage gap analysis for equal work across all work types assigned to the project, where diversity characteristics are self-identified.
- 02.
Remediation of the diversity wage gap, for all 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 diversity wage gap, after all remediation efforts are complete. The first context indicator is the total number of employees from underrepresented groups (EUG) on the project that had wages remediated, which is used to assess impact. The second context indicator is the percentage of the remediated diversity wage gap.
Step 1
To calculate the performance indicator:
- Determine whether employees are doing equal work (see Guidance below).
- Calculate the mean pay for employees from underrepresented groups (EUG) doing each work type by summing gross pay amounts and dividing by the number of employees from underrepresented groups.
- Calculate the mean pay for employees NOT from underrepresented groups doing each work type by summing gross pay amounts and dividing by the number of employees NOT from underrepresented groups.
- Calculate the combined mean* for employees from underrepresented groups pay across all work types.
- Calculate the combined mean for employees NOT from underrepresented groups’ pay across all work types.
- Subtract the employees from underrepresented groups’ combined mean pay from the employees NOT from underrepresented groups’ combined mean pay.
- Divide that result by the employees NOT from underrepresented groups’ combined mean pay and multiply by 100.
Step 1: Calculate for each work type
D = (w1(x1) + w2(x2) + … / w1 + w2 + …)
Step 2
Step 2: Calculate for each work type
ND = (w1(x1) + w2(x2) + … / w1 + w2 + …)
Step 3
Step 3
P1 = (ND - D / ND) 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 diversity 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 diversity pay gap after pay adjustments shall not exceed 3%. This represents ‘acting to avoid harm’. By ensuring that all employees receive equal pay for equal work regardless of their diversity characteristics, 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 diversity wage gap audit performed that states the diversity 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 determining employees from underrepresented groups
Diversity can encompass a large set of characteristics that would make it inordinately difficult to accurately assess the diversity wage gap in this Activity. In following the concept of prioritizing the most salient issues first, we shall define diversity using guidance from the UN Guiding Principles, which are based on internationally recognized human rights. They make clear that companies should pay attention to additional standards covering the human rights of individuals from groups that may be particularly vulnerable to negative impacts. These additional standards identify these specific groups as race, women, children, migrant workers, persons with disabilities, Indigenous peoples, and national or ethnic, religious, and linguistic minoritized groups. Therefore, the SEAM adopted definition of employees from underrepresented groups shall include:
- Race
- Sex
- Gender, including gender identity and sexual orientation
- Migrant workers
- Persons with disabilities
- Indigenous peoples
- Ethnic minoritized groups
- Religious minoritized groups
- Age (aged 50 and above, according to the ILO)
On types of equal work 92
There are three kinds of equal work:
- like work is the same or broadly similar. It involves similar tasks which 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 93
“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
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