Despite a growing patchwork of pay transparency laws, the gender pay gap in the United States remains mostly stagnant. The Equal Pay Act of 1963 (EPA), enacted as an amendment to the Fair Labor Standards Act, prohibits employers from paying unequal wages to men and women who perform substantially equal work at the same establishment.
Pay Gaps Still Exist
Despite its passage over 60 years ago, the EPA’s promise of equal pay for equal work remains unrealized for many.
Equal Pay Day symbolizes how far into the year women must work to earn what men earned in the previous year. According to Payscale’s 2025 Gender Pay Gap Report, women earn $0.83 for every $1 men make when data are uncontrolled. The gap widens when race, age, and motherhood are factored in.
This disparity is not one-size-fits-all, and neither is Equal Pay Day. While March 25, 2025, marked Equal Pay Day for all women on average, other dates highlight the deeper wage inequities faced by specific groups:
- Asian, Pacific Islander & Native Hawaiian women: April 7, 2025
- Mothers: May 6, 2025
- Black Women: July 10, 2025
- Latina Women: October 8, 2025
- Disabled Women: October 23, 2025
- Native American Women: November 18, 2025
These dates reflect how much longer each group must work into 2025 to match the 2024 earnings of non-Hispanic white men. The later the date, the wider the pay gap.
Pay Equity is a Strategic Business Decision
Pay equity is not only a legal and moral imperative but also a strategic advantage. Organizations that ensure fair compensation practices benefit from enhanced employee morale, reduced turnover, and a stronger reputation in the marketplace.
Conversely, failing to address pay disparities can lead to legal challenges, reputational damage, and diminished employee trust. While Equal Pay Act claims made up just 1.3% of total Equal Employment Opportunity Commission charges in the last year (1,116 charges nationwide), that number may rise as states adopt new pay transparency laws and employees grow more informed.
Breaking Down the Law
The phrase “substantially equal” refers to jobs that require similar levels of skill, effort, and responsibility, and that are performed under similar working conditions.
Courts have interpreted “skill” to include factors like experience, ability, education, and training.
“Establishment” typically refers to a specific physical work location, not the company as a whole.
Conduct a Pay Equity Audit
If your compensation strategy doesn’t align with your stated commitment to equity, it’s time to put your money where your mouth is.
A pay equity audit is a comprehensive, data-driven analysis of your compensation practices designed to identify pay disparities or liabilities, while considering factors that contribute to the pay gap. A well-executed pay equity audit goes beyond averages. It evaluates pay across roles, job levels, experience, and performance while controlling for non-discriminatory factors.
Employers should also assess how starting salaries are set, especially if salary history is still being considered. If disparities are found, employers must be prepared to respond swiftly, with documentation of both the findings and any corrective action taken.
Don’t Go It Alone
It’s not a question of if someone will question your pay practices—it’s when. Take a proactive stance: update your compensation policies, ensure they align with evolving legal standards, and commit to routine pay equity audits that surface and address disparities before they escalate.
