Closing a pay gap: a practical plan for a mid-size company
By the Equaudit team · Updated · 2 min read
When your figures show a category near or above 5%, the useful question is what to do next. This is a practical sequence. It is general guidance, not legal advice: national rules differ and you should involve your legal adviser and worker representatives where required.
Step 1: check the data before the pay
Many apparent gaps come from the data. Look for wrong gender codes, part-time pay entered as monthly instead of hourly, a leaver still in the file, or two different jobs mixed in one category. Fix these first and recompute.
Step 2: test whether the gap is justified
The directive allows a gap to be justified by objective, gender-neutral criteria, for example seniority, relevant qualifications or performance measured fairly. Document each criterion and check that it really explains the numbers. Compare people within the category one by one; the explanation must hold for the gap, not only exist in principle.
Step 3: pick the levers
- Correct individual salaries where the comparison shows an unexplained difference. It is the fastest lever and the most visible.
- Fix the entry point: set salary ranges for each job and stop negotiating starting pay case by case.
- Review promotions and raises: check that increase budgets reach women and men in proportion.
- Look at variable pay rules: eligibility and target amounts often differ by role in ways that affect one gender more.
Remember the timeline: a gap of 5% or more that is not justified and not corrected within six months of the report leads to a joint pay assessment. See the 5% rule.
Step 4: verify, period after period
Decisions made today show up in the next payroll exports. Recompute the indicators each quarter and check that the category moves in the right direction. A sustained trend, not a single figure, is the proof that the action worked. See why track your pay gap between two reports.
Frequently asked questions
Do I have to raise women's pay to close a gap?
Correcting unexplained differences usually means adjusting the lower paid individuals. Lowering anyone's pay to close a gap is not the intent of the directive and raises legal risks.
How long do I have to correct a gap?
The directive refers to a period of six months after the report for a gap of 5% or more that is not justified, before a joint pay assessment is required. Check your national law for the exact rules.