Mind the gap: Pay equity audits, done right, can build fairer workplaces

"Pay equity goes so far beyond just what the legislation says," she said. "An organization invested in fair compensation sends a clear message to its employees that it values them."

Starting the pay equity audit process, however, can seem daunting, especially for organizations without an immediate need or legal requirement. But even companies without complaints or visible inequities should consider this proactive step, said Accettola.

"It's about ensuring you're paying employees fairly and equitably," she said, adding that a fair pay structure helps foster trust and engagement among employees.

Money is a proxy

Heather Bussing, a California-based employment lawyer, said there’s another reason why getting compensation right is critical.

“Money is a proxy for all sorts of things in our organizations and our culture,” she said. “It’s a proxy for power. It’s a proxy for status. It’s a proxy for access to resources. It’s a proxy for value within an organization.”

If you look at two employees on a spreadsheet, and see that George makes more than Jane for doing the same role — “you’re going to think that Jane is not as good an employee as George based on that fact.”

Getting started with the right data

A pay equity audit begins with gathering the right data. According to Accettola, three critical elements form the foundation of the process: job descriptions, salary structures, and a job evaluation tool.

"You're not looking at the individual, but the job itself, to keep the process neutral,” she said.

Grouping positions of equivalent value is essential, even when comparing jobs that don’t seem directly related. "An administrative role in marketing might be compared to an administrative role in IT. The key is evaluating jobs of equivalent value, not just the same job title."

Once that groundwork is laid, organizations can move into the more complex analysis phase. This often requires expertise to ensure the data is properly assessed — and there’s no harm in looking for outside help at any step of the process.

"A consultant can help with the analysis of the data, especially in ensuring that the jobs are grouped correctly," she said.

Bussing agreed that the biggest lift in an audit is around getting the data right to ensure the organization is comparing apples to apples.

“The hardest part of a pay equity analysis is grouping the comparable jobs and figuring out what work is comparable,” she said. The best way to do that is to look at the job descriptions, but those often “live all over the place.”

“The recruiters have the salesy ones, and HR has the physical requirements, and departments have the duties and responsibilities,” she said.

AI’s role in pay equity audits

Artificial intelligence (AI) has begun to play a part in pay equity audits. Accettola said it can assist with writing and updating job descriptions, which can be a large and time-consuming task for any organization.

“It’s not a perfect tool, but it will do a good 30 per cent to 40 per cent of the heavy lifting that you need to do around your job descriptions.”

However, she warned that AI's output still needs to be reviewed and vetted to ensure it aligns with pay equity standards. The technology may help ease the workload, but it doesn't eliminate the need for human oversight.

Who should lead the pay equity audit?

Who within an organization should conduct the audit largely depends on the size of the company and the jurisdiction it operates in, she said.

For larger organizations, most provinces require a representative pay equity committee, typically including a cross-section of employees from management, HR, and potentially unions, said Accettola. In smaller organizations, the HR team or payroll department usually takes on the bulk of the work.

However, senior leadership should be involved, given the potential financial impacts of the audit’s findings. "There are material impacts to doing pay equity right. For instance, if you identify a gap that needs to be closed, you have to account for that cost," said Accettola.

The long road to achieving pay equity

Despite legislative advancements and growing awareness, true pay equity remains elusive. When asked why progress has been slow, Bussing pointed to a simple biological fact.

“We’re not there yet because women have babies,” she said. “That’s it. And because of continuing unconscious biases against women and people of colour.”

There’s a perception that women are less committed to organizations, or their jobs, something that holds true even for workers who are not married or don’t have children, said Bussing.

Accettola pointed to several factors, including a lack of legal repercussions in some provinces and limited awareness among small and medium-sized businesses.

"Larger firms get it, but smaller companies often aren’t aware of the legislation or what causes pay equity issues," she said.

Entrenched biases play a role, with male-dominated positions often receiving higher pay than female-dominated ones. "Men tend to negotiate more aggressively at the start, and nobody's checking along the way to see if this creates inequities."

Furthermore, while legislation focuses on gender pay equity, the disparities often extend beyond this binary framework, said Accettola. Other marginalized groups, including people of colour and the 2SLGBTQ+ community, face similar pay gaps. "We haven’t even fully addressed the male and female anomalies, let alone the inequities faced by other groups."

What happens after the audit?

Once a pay equity audit is complete, it’s not just a matter of giving raises and moving on. The audit is a "point-in-time exercise” that doesn’t eliminate the need for future-proofing, she said. "If you don't create a system around pay equity, you'll end up back where you started in a few years," she said.

Organizations should incorporate regular reviews into their compensation cycles to avoid regression. "I would say, annually, with your compensation cycle," Accettola said. "Make sure everything is compliant, and it will become a much more manageable process."

The role of pay transparency

Pay transparency is emerging as a key factor in promoting fairness, according to Accettola.

"It has made more headway for pay equity than just the legislation itself," she said. With employees now able to discuss compensation openly, organizations are under more pressure to ensure their pay structures are fair.

"The cost of turnover and low engagement is real, and pay transparency holds employers accountable," she said.

Common mistakes

Accettola concluded with a cautionary note: One of the biggest mistakes organizations make during pay equity audits is evaluating the person, not the job. "People often say, 'Well, Sally does it this way.' But we're not talking about Sally; we're talking about the job," she said.

Ultimately, conducting a pay equity audit is about more than just meeting legal requirements — it's about building a fair and equitable workplace that values all employees. For organizations serious about diversity, equity, and inclusion, Accettola’s advice is clear: "Pay equity is where the rubber hits the road."

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