Today is Equal Pay Day in the United States — a date symbolizing how far into the year the average woman working full-time must work to earn what the average man earned in the previous year. This annual observance highlights the persistent pay gap and underscores the importance of pay equity in today’s workplace.
After progress was made for the first time in 20 years in 2023, the gender pay gap returned to its previous levels in 2024. Latest figures from the Bureau of Labor Statistics revealed women working full time earned 83.2% of what men earned in 2024, widening the gap from the historically low 83.8% figure in 2023.
Understanding the difference between the unadjusted (raw) pay gap and the adjusted (controlled) pay gap is crucial for organizations committed to closing pay inequities and ensuring unbiased, legally defensible compensation practices.
The Current Pay Gap: What Do the Numbers Say?
This 83.2% figure represents the unadjusted pay gap, which measures the median earnings difference between men and women across all jobs without accounting for factors such as occupation, experience, or education.
The unadjusted pay gap is an essential measure because it reflects broader disparities in hiring, promotions, career advancement, and opportunity. However, it does not distinguish between pay differences due to job-related factors and those that may stem from discrimination or bias.
Adjusted vs. Unadjusted Pay Gap: What’s the Difference?
To better understand the root causes of pay inequities, we must break the unadjusted pay gap into two components:
- Explained Pay Gap – This portion of the pay gap is attributed to differences in compensable job-related factors such as career level, job function, education, experience, and tenure. These differences may result from historical inequalities in hiring, promotions, and access to high-paying roles.
- Unexplained Pay Gap (Adjusted Pay Gap) – After accounting for all relevant, job-related factors, the remaining portion of the pay gap is the adjusted (or controlled) pay gap. This gap highlights pay inequities that cannot be justified by legitimate business-related reasons and may indicate bias or discrimination.
Studies show that even after adjusting for relevant factors, women still earn less than men for the same work. Addressing this adjusted pay gap is the primary goal of pay equity analyses and remediation efforts.
Why Organizations Must Focus on Closing the Adjusted Pay Gap
The adjusted pay gap is a direct indicator of pay inequity that can expose organizations to legal, financial, and reputational risks. Companies that fail to address pay inequities may face legal action, and employee dissatisfaction, leading to higher turnover and lower engagement.
Taking a proactive approach to pay equity helps organizations:
- Ensure compliance with equal pay laws and regulations
- Mitigate legal and reputational risks
- Build employee trust and improve retention
- Enhance their employer brand to attract top talent
How Trusaic’s PayParity® Solution Helps Close the Adjusted Pay Gap
Achieving pay equity requires more than just awareness — it demands actionable strategies backed by robust data analysis. That’s where Trusaic’s PayParity solution comes in.
PayParity helps organizations:
- Conduct comprehensive pay equity analyses – Using advanced statistical modeling, PayParity identifies unexplained pay disparities within an organization and provides data-driven insights into potential risks.
- Pinpoint and address pay disparities – PayParity not only highlights pay gaps but also offers guidance on targeted remediation strategies, such as salary adjustments and structural policy changes.
- Ensure legally defensible compensation practices – By using rigorous methodologies, PayParity helps organizations create transparent, bias-free pay structures that align with regulatory requirements.
- Monitor and maintain pay equity over time – With ongoing reporting and analytics, organizations can track progress, measure the effectiveness of their pay equity initiatives, and make continuous improvements.
Taking Action on Equal Pay Day—and Beyond
Equal Pay Day is a reminder that pay inequities persist, but it is also a call to action. Organizations that are serious about achieving pay equity must go beyond surface-level reporting and take tangible steps to close the adjusted pay gap.
Here’s what your organization can do today:
- Analyze your pay data – Conduct a pay equity analysis to determine whether unexplained pay gaps exist within your workforce.
- Develop a pay equity action plan – Use insights from your analysis to implement data-backed remediation strategies.
- Commit to ongoing monitoring – Pay equity is not a one-time initiative. Regular reviews and continuous improvements are necessary to maintain compliance.
- Engage leadership and employees – Transparent communication about pay equity efforts fosters trust and accountability across all levels of the organization.
By leveraging Trusaic’s PayParity solution, organizations can move beyond awareness and take decisive action to ensure fair and unbiased compensation. Closing the adjusted pay gap is not just about compliance — it’s about building a more equitable and competitive workplace for the future.
Learn more about how our robust methodology simplifies pay equity and guides you to make compliant pay decisions with ease.
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