Imagine this: There are two coworkers who share the exact same role, experience, skills, and responsibilities. They’re both dedicated, driven, positive, and collaborative. But one makes $10,000 less than the other. 

For many – perhaps even you – this isn’t a hypothetical situation. It’s the reality of pay discrimination (also referred to as wage discrimination). It doesn’t matter if you’re the employee or employer. Anyone can play a part in it, and many don’t even realize they’re doing it. 

To find out if you’re a victim of pay discrimination, you’ll need to first understand what pay discrimination is in its many shapes and sizes. Then join us in fighting the good fight – stopping pay discrimination once and for all.

Key points:

• Pay discrimination is illegal but it still happens all the time.
• You can be discriminated against based on your race, gender, ethnicity, and other demographic characteristics.
• There is a long history of pay discrimination and the pay gap is shrinking, but we still have a ways to go.
• You have several legal rights that can help you fight back.

What is pay discrimination?

Pay discrimination happens when employees are paid less than their equal counterparts on the basis of their race, gender, sexual orientation, ethnicity, age, ability, or other demographic characteristics. 

It also affects more than just the impacted individual. Pay discrimination can perpetuate social and economic inequalities for generations.

Pay discrimination isn’t just unfair. It’s illegal.

The Equal Pay Act of 1963 prohibits employers from pay discrimination on the basis of sex. A not-so-fun fact is that when the act was passed, women workers were earning only 59 cents to mens’ dollar.

Since then, multiple laws have targeted pay discrimination based on race, color, sex, religion, national origin, and age. Then in 2009, the Lilly Ledbetter Fair Pay Act clarified that all inequitable and discriminatory payments are illegal…period.

A few states are taking things a step further with laws around pay transparency and wage history:

• California, New York, Colorado, Nevada, and Connecticut all prohibit employers from asking about salary history.
• Want to learn if your state has any of these laws? Check out our complete list of pay transparency laws by state, including progress on proposed bills on both a state and federal level. 

Different Forms of Pay Discrimination

There isn’t only one type of pay discrimination. There are several and some can even overlap. 

Here’s a rundown of the biggest forms of pay discrimination we’re fighting today 👇

Gender Discrimination

Today, women are participating in the labor market at near-record rates. The wage gap has significantly decreased but it hasn’t disappeared. And no, it isn’t because women aren’t negotiating – that’s a myth. When it comes to gender and negotiation, women actually negotiate more than men. 

Women now earn 84 cents for every dollar paid to a full-time working man. That adds up to nearly $10,000 less per year in median earnings. 🤯

When women become moms, they’re either less likely to be hired and typically offered a lower salary than their male counterparts. On average, moms working full-time earn just 74 cents for every dollar paid to a dad in the US.

It only gets worse with age. In 2022, women ages 25 to 44 made 88% of what men their age made, while women 65 or older earned just 78% of men their age.

There are a few potential reasons this pay gap exists. Women are underrepresented in high-paying jobs like managerial and STEM occupations, but they’re overrepresented in lower-paying jobs, like education and services.

But even when comparing apples-to-apples (AKA comparing the salaries of men and women in the exact same job), the wage gap exists…and that’s because of bias. A Yale School of Management study found that women got higher performance ratings than men, but were consistently and incorrectly judged as having less leadership potential.

What’s the big picture here? The cumulative cost of the gender pay gap to women has amounted to $61 trillion since 1967, the first year of available US Census Bureau data. That’s nearly 3x our country’s GDP.

Racial Discrimination

Over the past five years, the racial wage gap has been shrinking. However in 2023, non-white workers in the U.S. experience large pay gaps compared to their white peers. 

For every dollar paid to white, non-Hispanic men:

• Asian women are paid 97 cents.
• White women are paid 79 cents.
• Native Hawaiian or Other Pacific Islander women are paid 66 cents.
• Black or African American women are paid 63 cents.
• Hispanic or Latino women are paid 58 cents.
• American Indian or Alaska Native women are paid 58 cents.

Why is this happening? Racial minorities are overrepresented in lower-paying jobs. Economic theorists often blame the racial pay gap on differences in education, experience, and the fact that Black workers are more likely to live in lower-wage Southern states. Yet, even when controlling for these factors, Black workers earn 14.9% less than white workers. Sounds like a bad case of employer bias.

Sexual Orientation/Gender Identity Discrimination

36% of LGBTQIA+ workers say they have experienced discrimination in the workplace. Overall, LGBTQIA+ workers earn about 90 cents for every dollar that straight and cisgender workers earn and are less likely to have access to health insurance and other employer benefits.

Age Discrimination

More than 40% of workers over the age of 40 say they've experienced age discrimination at work in the last three years. The role of bias is no secret here. Employers admit that they're looking for younger talent. 47% say they're worried about older workers' tech skills and 25% say they'd pick a 30-year-old over a 60-year-old – even if both candidates were equally qualified.

Disability Discrimination

Workers with disabilities earn 84% of what workers without disabilities earn. This is often about accessibility. Employers may not provide workers with disabilities the accommodations they need, like a wheelchair ramp or a screen reader.

So, what can you do about it?

Here are 3 simple steps you can take: 

1. Know your worth. Compare your salary to the market rate for your specific experience and position to identify discrepancies—which may be indicative of discrimination. Check out our free market research guide to find your market rate, then compare to our Salary Database. Also look at what kind of policies your employer has about discrimination so you can identify any times they’ve been broken.
2. Ask for regular salary reviews. Salary reviews allow you to openly communicate with your employer, negotiate your salary, and make appropriate adjustments. Need help negotiating? We’ve got a free guide for that. Also check out our free list of salary negotiation scripts!
3. Vote! While recent legislation has improved salary transparency and pay equality, there’s still progress to be made. Know the candidates on your local ballot and vote!

How do I know if I’m a victim of wage discrimination?

Even after doing everything you can to advocate for yourself, you may still fall victim to pay discrimination. 

Here’s what you can do:

1. Know the policies. Thanks to the National Labor Relations Act, it is your legal right to talk about pay with your employer, without fear of retaliation. Your employer may have additional policies for compensation, complaints, promotions, and/or discrimination claims. Review these too.
2. Gather any “proof,” including your market rate, pay stubs, info about your past experience, your coworkers’ pay and experience, and job descriptions. Make sure to take notes from any meetings, emails, or other communications related to your pay.
3. Seek internal support. Request a meeting with your boss or HR to present the issue and walk through your proof. Document the date you met and who was present, detail what you discussed during the meeting, explain how you found out about the pay discrepancy and the proof you presented, and communicate exactly how your boss or HR rep responded. After you meet, send a follow-up email to confirm what happened during the conversation. 
4. Find a group. If you’re a member of a union, ask about filing a grievance or find out whether pay discrimination is covered in your collective bargaining agreement. This is a common occurrence in many high-paying trade jobs. And if you’re not part of a union? Team up with your coworkers to start a petition or organize a company-wide meeting.
5. File a complaint with the EEOC or your state’s enforcement agency. Call the US Equal Employment Opportunity Commission hotline at 800-669-4000. If you don’t want to file a complaint, you can still speak with an EEOC counselor to learn more about your legal rights.
6. Speak with an attorney. Learn your legal rights before you move beyond internal complaints. Equal Rights Advocates is a great resource. They offer free, confidential legal advice.

Want to learn more about how pay discrimination shows up in everyday work-life? Read our weekly Salary Transparent Street newsletter to stay up to date on all things compensation, money, and getting paid what you’re worth.

For more Salary Transparent Street resources:

• Do you know if you're being underpaid? Take our free quiz to find out!
• Need help determining your market rate? Download our free Market Research Guide to learn what you should be making.
• Explore over 5,000+ individually reported salaries nationwide across all industries in our Salary Database!
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• Send us an email ➡️ hello@salarytransparentstreet.com