Comp and Coffee

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Ruth Thomas: Hello everybody, and welcome
to another episode of Comp and Coffee,

where we serve up fresh insights on all
things compensation, hr, and rewards.

I'm your host, Ruth Thomas, and today
we're diving into key findings from

PayScale's 2025 Gender Pay Gap report.

And joining me today is Amy.

Welcome back to the podcast.

Do.

Give the a quick intro to who you
are, um, to the audience in case

they don't remember you from episode.

Amy Stewart: Absolutely.

Yes.

Um, so as Ruth mentioned,
my name is Amy Stewart.

I am the, uh, principal content
strategist here at PayScale for

our research and insights team.

I'm also the author of the
Gender Pay Gap report in terms

of just the writing part of it.

So I'm very excited to talk about
the findings in that report, and

I'll talk about how Pay Transparency
is impacting the gender pay gap.

Um, at least in the USA.

Ruth Thomas: Great.

Thank you.

So if you listen to our episodes in
order in the last episode that you

will hear, um, episode 1, 1 1, I think,
um, I talked about the fact that we

released our gender pay gap report
on March 24th this year, um, which.

Um, is the same day as us, was
the same day as us equal payday.

Um, and it's, what's interesting about
our report is the fact that we have

over a long period been measuring both
the controlled and the uncontrolled pay

gaps, uh, based on our compensation data.

And Amy's gonna talk to you
a little bit more about.

What that data is.

Um, now just for those who may
not be familiar with the terms,

uncontrolled pay gap is also known
as the unadjusted pay gap, sometimes

also known as the opportunity gap.

So that is the average pay gap of
whatever group you are looking at.

Um, and that's what we often see quoted
in the press, um, as the gender pay gap.

So in our report this year that was
showing, uh, that women earn just 83 cents

on the dollar compared to every dollar a.

man makes highlighting kind of
the persistent barriers that

women face, particularly in
access to higher paying roles.

The other pay gap that we, which we are
able to monitor is the controlled pay gap.

This is also known as the adjusted pay
gap, also known as the equal pay gap.

So this is where you are
looking at individuals who are.

In like work or similar work or for,
or maybe in the same job and have the

same knowledge, skills and experience.

And there you're doing a much closer
comparison where you would expect

those people to be paid the same.

Um, in our data this year it
hadn't changed from last year.

We saw obviously that gap is a lot
narrower than the uncontrolled pay gap.

It was 99 cents Uh, women earn for every.

dollar A man makes accounting
for job title, experience,

and location in our research.

So those the key two key
headline figure this year.

Do you wanna talk some
more about what makes Gap.

Amy Stewart: Absolutely.

Yes.

Um, PayScale's methodology
is really interesting.

Um, to determine the pay gap we use our
employee reported data set, at least

for now, and a proprietary compensation
model to estimate pay based on.

All the compensable factors
we gather for an individual.

So for example, um, we can take a nurse.

Uh, a principal factor for a nurse
might be whether they work in a

school or a pharmacy or a hospital,
number of beds in that location.

Whereas for a sales worker, it might
be how, um, the size of their sales

territory, whether they, they've
managed one branch or many the size

of the region, or which region it is.

Um, and for other occupations, we need to
know the type of security clearance that

they have or whether it is still active.

So that list can get considerable.

And we are, um, and it's based on
a lot of detailed questions that

we ask in our online salary survey.

We then use all of that data in
aggregate to provide an estimate.

Um, the pay is affected by all of the
unique compensable factors for that job.

Most often, and, and.

In the case that we're looking
at, we're looking at job title,

we're looking at location, years
of experience and education.

Then we evaluate men and women's
actual pay, uh, to the model based

estimate to find the difference.

The pay estimate acts as a controlled
baseline for pay, regardless of

gender where all other compensable
factors are controlled for.

That's the controlled gap.

When we take the difference, we
consistently find that men earn

more relative to the modeled
baseline that women do on average.

This average percent difference
is the controlled gap.

It is presented as cents on the
dollar, um, which you just mentioned.

Ruth is, um, uh, 83 cents in 2025.

This is not just true holistically,
but also over time until very recently,

um, when I've been doing this report,
we saw this pay gap between men

and women in every industry, every
occupation and every level of education.

We saw the pay gap widen for women of
color, um, and as women ascended the

career ladder in recent years, very,
very recently, we have started to see

the pay gap close somewhat in some
industries, occupations and location.

Only when data are controlled,
and we'll talk a little bit about

what may be influencing that.

Um, however, we've also seen the pay gap
stagnant, um, and widen in some areas.

So those are just some kind of conflicting
things happening, um, when it comes to

equality in pay between men and women.

Ruth Thomas: Now, what did we see
in the report this year, um, that

was different from last year?

Were there any new findings this
year that kind of stood out in

terms of the data that we saw?

Amy Stewart: Yes.

Every year we hope to say that
the pay gap has closed, but

that was not the case in 2025.

So this year equal payday
falls on March 25th.

2025.

We released the report one day early
on the 24th in honor of equal payday.

Um, equal payday is calculated
not by PayScale as calculated this

year by the American Association
of University Women, the A A UW.

Um, we publish our report to correspond
with the national recognition.

Even if our dataset shows something
different, um, this year, equal payday is

later than it was in previous years, which
has showed that the gender pay gap has

widened according to these other studies.

Some reports have seen
this widening since 2023.

Our reporting hasn't shown a widening of
the pay gap, but it has shown that the pay

gap has stagnated over the same period.

We also do see widening of the pay
gap in some segments of our data.

Um, some fluctuation is normal,
but we don't like seeing the pay

gap widen, especially for women
of color, which it did this year.

Um, this year, American Indie
women experience the widest pay

gap when data is uncontrolled.

And Pacific Islander women experience
the widest pay gap when data are

controlled between 2024 and 2025.

We have seen the uncontrolled pay gap
widen for Asian women, black women,

Hispanic women, and white women.

We've also seen the gender pay
gap widen in some industries

with the largest widening of the
pay gap seen in construction.

We also calculated the pay gap for parents
by remote work status, by job seeking

status, all of which show that women are
more disadvantaged when it comes to men.

Um, in terms of how they are paid, I.

Ruth Thomas: Yeah, so I mean, if the, the
best way to, you know, take a deeper dive

into this is to get access to the report,
which you can do through payscale.com

through our research center.

Uh, but you can find the way that we
slice and dice the data in many ways just

to try and look at how different groups
of people are impacted and also the

different causes of the gender pay gap.

So you've just alluded to some of those.

There.

Um, so has, has the pay gap.

Closed anywhere, Amy, I mean,
we know we've got all this pay

transparency legislation going on.

Is that having an effect?

Amy Stewart: Yeah, so I think that there
is a really exciting trend happening

with pay transparency legislation.

There is evidence that pay
transparency does close pay gaps,

and that is why this legislation
has been passed in so many states.

Um, but the impact is.

Difficult to ascertain because it takes
time for the legislation to have an impact

on the actual populace and how people
are paid, but it may be having an effect.

So over the last few years, we have
seen the pay gap close completely,

at least when data is controlled.

For some locations where there
are pay transparency laws, 6 of 10

states, including, uh, Washington,
DC which is, is not a state, but

is a, a location that we look at,
um, have had pay transparency laws.

Prior to 2025, and they have closed
the pay gap when data are controlled.

This includes California, New
York, Rhode Island, Connecticut,

Maryland, and Washington, dc
But we have to note some pay.

Some states with pay transparency
laws have not closed their pay gaps.

Um, in addition, there are also
states that have closed gaps that

don't have pay transparency laws.

Um, so it's not a clear.

One-to-one in the sense of a, a
state passes a law and then two

years later the pay gap closes.

Um, we are seeing
fluctuations year over year.

Washington State and Colorado have pay
transparency laws and they closed their

gaps last year, but not this year.

Um, so again, some fluctuation is normal
and we are, um, hopeful that this trend

is evidence that pay transparency laws are
working and it's gonna take time for us

to see that that is a consistent trend.

Um.

It is interesting to look at the context
of the depay gap widening by some

reports, which we do see in some segments.

So as we just talked about, we didn't look
at this, but I did look at a, a similar

report from Job Seeker that shows that
pay is more equal in the West and Midwest

and less equal in the Northeast and south.

Um, maybe that's something we will
look at in a future report to see if

we can corroborate those findings.

Um, we also note that more liberal
states have passed or are considering.

Pay transparency legislation
than conservative ones.

So in 20 25, 14 states and Washington
DC have active pay transparency

laws, including Nevada, which is a
conservative state, and another 10

are pending, which include Alaska,
Florida, Georgia, Kentucky, Missouri,

South Dakota, and West Virginia.

All of which are conservative states.

Um, however, a bill in Montana failed
and there and no conservative state has

passed, pay transparent legislation yet.

Um, it's important to note
that pay transparency could be

closing pay gaps even in states.

Without pay transparency laws,
because a lot of organizations

employ people in multiple states.

So if they have to advertise job ranges
in California, they might go ahead

and also do that in all of the other
states where they have employees.

So, um, in addition, uh,
employees and job seekers are

clamoring for pay transparency.

They're asking about pay ranges more,
and we've also seen that reflected in

our compensation best practices report.

Um, so although some states may be.

Waffling on this legislation or
striking it down to support, uh,

corporate interests, like what we
think happened in Montana and Virginia.

We have not seen pushback from
the public against the concept

of fair and transparent pay.

It does seem like that is
something most workers want.

Ruth Thomas: And why do you
think we would see resistance in.

Transparency, like implementing pay
transparency in order to close pay gaps,

it seems like the right thing to do.

So why would some states not.

Amy Stewart: Yeah.

When it comes to pay transparency
legislation, the resistance

we think is in the effort.

Um, required of organizations to
come in compliance with those laws.

So most organizations don't
strive to pay employees unfairly.

They're not actively trying to
disadvantage their workers, but

providing, uh, proving that pay is
equitable and fair takes effort.

It requires that organizations
have a compensation strategy.

They have identified the
compensable factors that impact

pay for all of their jobs.

They have a job architecture that
they include critical information in

their job descriptions to price jobs
correctly, and that requires that they

have processes for communicating their
pay, um, and answering manager and

employee questions about it, um, all
the way to the top of the organization.

So that is a mammoth effort.

For some organizations that may
not have any of those processes

in place and may not have the
resources to build those processes.

And for those that have just started
using market pricing, there's a lot that

they have to do before they can start
publishing ranges confidently in job ads.

Um, and they may not know where to start.

So for larger organizations, there is an
administrative burden associated with pay

transparency, and they may also not want
to give up some of the power that they

retain by keeping that pay process opaque.

So this leads to lobbying against
legislation that would be, um, forcing

them to comply, um, with, with those laws.

So the final reason is that
they're legal concerns.

A lot of organizations
wanna pay people fairly.

They're not trying to
pay women less than men.

Um, and that's true for all protected
classes, but they're afraid to do

the pay equity analysis because they
don't know what they're going to find.

And once they do the analysis and
have that information, they are then

obligated to do something about it.

And so they wanna make sure that
they have all those ducks in a

row before they take on that work.

Um, so pay transparency legislation,
you know, requires them to do a lot of

things that they may not be ready to do.

Um, and for that reason, they,
they may be hesitant to make

that a law in their state.

Ruth Thomas: Yeah.

And, and it's a good, you know, call out
Amy because it's something we've obviously

been working with our customers, with our
clients, um, over the, the period of time

that this legislation has been emerging.

And, you know, we, and we can see.

What they've been doing as it plays out
in the trend data that we look at in our

compensation best practice report as well.

So, as you say, we know, you know,
there's been a huge amount of

effort for organizations to try and
mature their compensation processes

to make sure that they're able
to, you know, at the very basic.

Understand what a pay range
should be to put on a job posting.

But the next very critical stage,
as you say in that is the relativity

of that to how everybody else
is paid within the organization.

'cause otherwise you're gonna end
up with employees who are gonna be

unhappy because they don't feel that
their pay, um, is, you know, evenly.

Um.

Matched against, for example, that
public, um, pay range that you're

posting potentially in a job advert.

So yeah, that, um, I do think, you know, a
lot of organizations have done that work.

You know, where when we talk to
organizations and when we interact

with them on the webinars that I do
with Lulu site, our employment council,

so we do pay legislation updates
quarterly, um, listening to what we

hear through the polls, listening to
what we hear through the questions

about what their challenges are.

2025 is really the year
of pay communication.

And that's the part, the
journey they've got to.

So a lot of them we know, have done
the hard work in terms of building

pay ranges, um, making sure that
people are, you know, they've, they've

remedied internal pay and equity.

And now they're trying to train
people to be able to talk about pay.

So, um, so hopefully, you know,
we will see this journey continue.

But let's get back to the gender pay gap.

One of the things we dive into the,
in the report, and we're very lucky to

be able to do that with the data that
we have, is start to think about what

are some of the causes of the gender
pay gap, and we can evidence that.

So talk me through some of the stuff that
we saw in the gender pay gap research in

terms of what's driving these pay gaps.

Amy Stewart: Yeah, so I think
understanding the causes of the gender pay

gap, it, it helps to look at the history
of, of where we were and where we are now.

Um, and to the point that you just made.

A lot of organizations are
just starting to get to the

point where they're confident.

Enough to publish those pay ranges.

And a lot of that was because of the great
resignation and the economy that we had,

um, during that time, which created this
impetus to improve pay communications

and to prove, improve pay equity because
a lot of, or were bleeding talent,

um, over the perception of unfair pay.

Um, so you have to really go back
and then, and look at everything

that has led to that moment.

So, um, you know, historically.

Women were not able to work.

Um, and when they were, their work
that they were doing was relegated

to service jobs, childcare, nursing
jobs that served the community.

And those jobs pay less
in the United States.

During World War ii.

Women took on the rob on, on the jobs that
men had, and they found that they enjoyed

that work and they were good at it.

Um, but they were paid half
of, of what men were paid.

Um, at that time in the 1940s, um,
when the men came home, the women

were dismissed from those jobs and.

Civil rights followed in the March on
Washington for Jobs and freedom, which

included the demand for equal pay.

An equal Pay Act was passed in 1963
and civil rights followed it in 1964.

Um, but that didn't automatically change
centuries of bias and discrimination.

That fight is still ongoing.

So while gender pay gap has been slowly
closing year over year to align with

our values as a nation, our research
shows that women are still being paid.

Less than men, even if
just a little bit less.

Um, and they're occupying lower paying
jobs and they are sometimes paid

less in the same job, doing the same
work, despite that being illegal.

Ruth Thomas: Yeah, it's really
interesting 'cause we talk about all

the time about systemic issues driving
this and then we're like, well what?

What are those systemic issues?

And actually I find it fascinating.

It's definitely a pet topic of mine.

It's like the social economic history
of how we got to where we are and how.

The whole construct of
work has become what it is.

Um, I did a bit of research going
back further than the period that

you talked about there, like around
the World War ii, um, even back

to pre-industrial Revolution,
where you see the concept of that.

An agricultural based economies that
everybody was equal and everybody worked

together as families in the fields.

And then as industrialization started to
happen, we started to see everybody go and

work in factories or like use machinery.

Then it got to the point that
it was too dangerous to have.

Children, um, in the factories.

And so the women left the factories with
the children to care for them, and the

men were left working in the factories
and you kind of carry on from there.

So it's a really, I find it fascinating
in terms of understanding how we

got to the place that we are today
and how that impacts PAXs pay gaps.

'cause um, people often kind of
just really wonder like, what

is it that's systemic here?

I don't understand that.

What is systemic now?

One thing that we know is a big driver
of the, the pay gap is, is related

to motherhood, and that is often
known as the motherhood penalty.

Um, so for those who may not be
familiar with that term, do you

wanna explain what that means and
how we saw that show up in our study?

Amy Stewart: Yeah.

So, um, the largest contributor to
the gender pay gap is this expectation

that women are destined to be mothers
and will leave the workforce at.

Some point to raise children or
be less dedicated to their jobs,

despite men also being parents.

Um, according to our report, women
earn just 75 cents for every dollar

earned by men when they have children.

Women are also presumed to be less
capable than men due to biological

differences, whether real or imagined,
which can impact what women study in

school, what jobs women apply for.

Whether and how women are mentored
the tasks they are given to do,

whether they are considered seriously
for promotion and whether they are

penalized for negotiating their pay.

Um, we do not study all of that in our
report, but we do know that women are paid

less when they are mothers, while men earn
a 2% pay premium when they are fathers.

We also see the pay gap widens as women
age and as they ascend the career ladder.

For example, women start off in their
careers behind and never catch up

for, um, by 30, the gap widens by 45.

It drops to 72 cents on the dollar.

The gap is the worst for
women who are in leadership.

Women who reach the executive
level make only 72 cents for every

$1 that male executives earn.

And we see that education
does not close that gap.

At no higher level of education
beyond a bachelor's degree,

does the pay gap close more?

It's worse for women who have MBAs,
um, who earn just 77 cents compared

to every $1 that men with MBAs earn.

Ruth Thomas: I mean, that's an
interesting fact on its own.

And I think we've looked
into that, isn't it?

It comes down to the subjects that
women study, um, that can lead to

some of those educational gaps.

Um, but it doesn't really necessarily
explain it with MBAs 'cause surely they're

kind of studying the same type of work.

So, um, yeah, so there's definitely
something happening, um, within, within

the workplace that's impacting that.

So we understand from the report lots of
information about the gender pay gaps.

What can organizations do?

Do you suggest, Amy, to close the
gender pay gap or to close the pay gaps?

Amy Stewart: Yeah, so the easiest
thing to do is to understand that

like, sorry, I'm have to repart that.

Ruth Thomas: Okay, I'll stop.

So what Amy, we understand from the
report, um, lots of different ways of

looking at the gender pay gap and some
of the causes that drive it, but more

importantly, what can organizations
do to close the gender pay gap?

Amy Stewart: The easiest thing
to do is to understand what your

pay gaps are and the results of
that analysis may be surprising.

Um, organizations need to develop
a compensation strategy with

compensable factors explicitly.

It and baked into a formal
job architecture that is

based on trusted market data.

They need a job architecture with
job leveling to consider consistency

when it comes to career growth.

They need to conduct pay equity analysis
and actually measure the pay gaps in

their organization, not just for gender,
but for all the protected classes as

well as specific jobs and families.

Software makes this easier, which is, you
know, why we talk about it, but it's also

just about the administration process
and all of the other things that impact,

like systemically how women are paid
and promoted within the organization.

So, um, what's important to think about
is not just the impact that you're having

on the, uh, numbers, but the impact that
you're having on people's lives, um, by

ensuring that pay is, is fair for both
men and women and for all the other, all

the other employees at your organization.

Ruth Thomas: Yeah, and that kind of
is a nice segue to some of the next

piece of research that we're gonna be
focusing on within the Insights team.

Isn't it Amy?

We're gonna be redoing our Fair Pay Impact
report, which is a very popular report.

I think we, last time we
updated that, uh, was 2022.

Um, do you.

Give us, I'm, I put you on the spot
here, but you wanna give us a quick

summary of what that report is so people
can maybe look forward to that one.

Amy Stewart: Yeah, I think the
first time we did it was in 2018.

That was before my time at
PayScale and then I think it

was 2021 that we updated it.

Although I would have to go
back and look, uh, to make sure.

But um, yes, the Fair in Pay,
the Fair Pay impact report.

Ask the question, what do
employees think when it comes to

whether or not their pay is fair?

So do they think they are paid at
market, below market or above market?

And then we take what they are paid and we
compare it to the averages, um, of those

jobs for, for their, for their peer group.

And we evaluate whether or not they
are accurate, accurately understanding

whether or not their pay is fair.

And it's always off.

And the percentages that it's
off are always interesting.

Um, so the, the takeaway of this
report is that it's less about.

The work that you do on the backend to
make sure that employees are paid fair

and more about how you communicate it.

Um, because there can be rampant
reasons why people might misunderstand,

um, that their pay is fair.

And if they don't know all the work
that you're doing to ensure fair

pay, they may come up with an idea.

I.

Um, that their, that their pay is
unfair and leave your organization

when they ought to be celebrating.

Um, how, how fairly they are
paid and all the work that you

are doing, um, as a compensation
professional to ensure that equality.

So, um, it's a very interesting report.

We're excited to update it,
especially after the tumultuous

years that we've had, um, over
the past, uh, you know, 3-4 years.

So it'll be interesting to see if
those perceptions have changed at all.

Ruth Thomas: Yeah, and it's, for
me, I think it's a fantastic report.

When I get so many people ask me
like, how can I justify the case

for investing in pay transparency?

How can I.

Justify the case for
investing in Fair Pay.

Why is Fair Pay important?

And this really kind of does
draw a, a line between people's

perceptions of pay and their
intention to leave an organization.

And, and we see a very clear link,
which is why I think, you know, this

is a report that ends up being one
of the most quoted reports that we

have, you know, by other people when
they're talking about the whole.

Story of fair pay.

So, okay.

Amy, thank you for joining me
today and for taking us through

those valuable insights from
the 2025 Gender pay gap report.

Um, as I said earlier, if you wanna
access that, go to payscale.com

and head to our research section and
you'll be able to access the report.

It's all online there, that report.

Um, and then there's a downloadable
asset this year, I think, isn't there?

There's a, a summary asset
that you can download, um,

to get some further insights.

So thank you very much
as always for listening.

If you have any other topics you'd
like us to explore, please feel free to

reach out to us@coffeeatpayscale.com.

Thank you as always for tuning in and
we'll see you next time for another

hot take on all things compensation.

Thank you very much, Amy,
for joining me today.