Equal Pay Audits: For Multinational Businesses, It's Not Just About Gender

According to the United States Bureau of Labor Statistics, in 2015, women working full-time in the US had median weekly earnings that were only 81 percent of those of male full-time workers. Similarly, in the UK in 2016, women were paid roughly 18 percent less than their male counterparts, according to the Office for National Statistics. Indeed, equal pay for women has become a global issue, attracting attention from national and local governments around the world as well as from leading multinational companies.

Acknowledging the persistent wage gap between men and women, many multinational companies, including behemoths like Apple, Gap, Google, Salesforce and SpaceX, have committed to conducting internal pay audits as a first step toward combating gender pay inequality. Last year, Salesforce announced the results of its own internal pay audit for 17,000 global employees. According to Fortune.com, Salesforce spent US$3 million to make salary adjustments for approximately six percent of workers to eliminate discrepancies. Google, in an effort to address the wage gap, sets an incoming employee's salary based on the market rate of the job rather than the person's prior salary. Because it offers salaries based on market rates, Google found that, on average, women receive larger pay increases than men when they join the company.

Numerous governments around the world have also joined the movement to address equal pay for women. In the US, the Equal Employment Opportunity Commission (EEOC) announced plans to collect detailed pay information from US employers. Australia, Austria, Canada, Denmark, Finland, France, Italy, Norway, Sweden and the UK have all passed legislation requiring private sector employers to report on the gender pay gap. Specifically, these countries place a duty on private companies to report on gender pay differences. All except Norway and the UK require companies to make these reports available internally to employees and/or employee representatives. France and the UK even require the report to be published on the company's website.

However, in a world that includes nearly 80,000 multinational companies, the gender pay gap is not the only discrepancy attracting government attention. Numerous legislatures are expanding the focus of the equal pay for equal work movement to include protections against other types of discrimination, such as nationality. For example, at least seven states in the US have passed legislation requiring...