Written by Zara Chechi Reviewed by Heleana Neil Updated on January 11, 2023 On this page Gender Wage Gap – Fact or Fiction? Gender Wage Gap - The Motherhood Penalty Gender Wage Gap – The Race Penalty Top Tips from Businesses to Close the Gender Wage Gap Expand With years of campaigning and conversations about the pay gap between men and women, it seems there have been shifts in the right direction, but is it enough?We explore the current gender wage gap status and delve into the various financial fines women face in the workplace. Gender Wage Gap – Fact or Fiction?The gender wage gap has long been seen as a systemic issue, affecting the equality of women in the working world. However, is it all as it seems? When you assess the wages of men and women as a whole, women make $0.82 for every $1 earned by men.When you compare the wages of men and women with the same qualifications and job, women make $0.99 for every $1 earned by men.When you put it like this, it seems like the gap is not much of a gap anymore. But this uncontrolled wage gap tells us something about societal attitudes towards female-dominated careers. For example, women are more likely to be in roles related to education or healthcare, whereas men are more likely to work in finance or engineering.Some have argued that the wage gap is a myth and only exists because women make different choices from men. For example, women are more likely to take time off to care for children or elderly family members. Men are more likely to take on extra shifts when offered, whereas women tend to avoid these because of the aforementioned reasons.But does this accurately reflect the true state of the wage gap and societal attitudes toward women and their place in the workplace? Even if men and women were paid equally for the same qualifications and job, the uncontrolled wage gap would still exist. This is because better-paid positions are more accessible to men than women. Gender Wage Gap – The Motherhood PenaltyThe motherhood penalty demonstrates the punishment women face for becoming mothers. Women and men who do not become parents earn the same amount, whereas women who choose to become parents make $0.74 for every $1 earned by men who become parents. The controlled gap closes this a little, but not enough, with women earning $0.98 for every $1 earned by men.Research shows that when some men become parents, their future earning potential increases because employers see this as a sign of maturity and reliability. The workforce often hears stories of women who have attempted to hide their pregnancy (or even marital status) when applying for jobs because this tends to put them at a disadvantage. The outcome of the motherhood penalty is that women are penalized for becoming mothers – not just financially, but they also struggle to advance their careers once they re-enter the workforce. Gender Wage Gap – The Race PenaltyIn addition to the motherhood penalty, women of color also face penalties – specifically Black and African American women. With the controlled wage gap (men and women who have the same qualifications and job), these women earn $0.98 for every $1 earned by white men. The uncontrolled gap shows a much larger disparity, with black women earning $0.79 for every $1 earned by white men. Top Tips from Businesses to Close the Gender Wage GapPay transparencyProvide flexible working optionsOffer pay based on market value and not previous salaries or salary expectationsFormal policy changeWe spoke to businesses to see what steps they’re taking (or have taken) to ensure men and women are paid fairly in the workplace.California is the latest state to pass pay transparency laws. Companies with over 15 employees are now required to list salary ranges for positions and ensure this information is available to current employees.Pay transparency laws are a key move to closing the gap, a step that many businesses are now taking. Peter Lucas, owner of Relocate to Andorra, tells us “many companies have a policy of not discussing salaries with fellow employees, but this lack of transparency can unintentionally perpetuate gender-based disparities in pay. When salaries are kept secret, it becomes difficult to identify whether there are any patterns of unequal pay, and employees may be less likely to speak up if they believe they are being paid unfairly. To create a more level playing field, we've considered promoting pay transparency within our organization. This involves sharing salary ranges for different positions within the company, or even disclosing individual salaries upon request. By increasing transparency around pay, we help ensure that our employees are being fairly compensated for their work.”Anup Kaysatha, the owner of Height Comparison, has a forward-thinking approach to combating the uncontrolled wage gap. Kaysatha says, “We’ve had to re-evaluate our hiring procedures to help combat gender pay inequity in our company. For instance, during interviews, we have stopped asking candidates to tell us about previous salaries, or salary expectations. We realized that basing salaries on previous salaries/salary expectations often disadvantaged the successful female candidates. Now, we base pay for new hires on the current market value of their skills and average pay for similar roles in the industry.”It is this dynamic approach to closing the gender wage gap that allows societal attitudes and expectations – which have been the primary cause of the gap – to slowly be left in the past, where it belongs.The factors that contribute to the uncontrolled wage gap, such as motherhood or other responsibilities, which mean women sometimes have less time and resources to put towards their role, can also be mitigated to an extent by their employers. The solution should not be that women no longer become mothers or have family responsibilities.One employer who understands this is Mark McShane, owner and MD of Skills Training Group, who tells us, “We offer flexible work arrangements and policies that support employees of all genders. This includes things like paid parental leave, child care assistance, and flexible scheduling options”. However, when organising it with them, be conscious of how hybrid working can hurt your female employees' career progression and work to mitigate this.Almost every employer across the country is aware of the wage gap, but awareness is only the start. What actionable steps can businesses take to close the gap? Riley Beam, managing attorney at Douglas R. Beam, says, “The one thing we noticed that really made a difference was adopting a formal policy — it sets an impactful start to any shift in workplace norms. Closing the gender wage gap needs more than just awareness. Implementing and enforcing such a policy can tackle the problem at every level. Let’s not forget that addressing the gender wage gap, and introducing positive changes, requires a committed effort. A policy change helps various departments and personnel to recognize and study the shift, note down their duties and responsibilities to initiate and assert it, and further implement practices that help bring this change to fruition.”Without creating and adopting new policies, the wage gap conversations will always remain that: conversations. Enacting policy change pushes businesses in the direction that will ensure women are paid equally and fairly in their workplace. Written by: Zara Chechi Business Services Expert Zara is a Payments Expert, specialising in writing about Point of Sale systems. With a Law Degree from City University of London, she has used her legally-honed research and analytical skills to develop expertise in the Business Services world. Featured in FinTech Magazine, she quickly became an expert in payroll, POS systems, and merchant accounts. Reviewed by: Heleana Neil Business Services Editor Heleana Neil specialises in Business Services, managing the strategy and production of content for SMBs, helping businesses with the challenges and opportunities they face today. Covering everything from payroll to payment processing, Heleana uses her expertise to help business owners make better, informed decisions and grow their companies.