Study Shows Gender Pay Gap Widens When Taking Bonus Pay into Account

ADP Research Institute® announced it recently released the Rethinking Gender Pay Inequity in a More Transparent World study, which found that the pay gap that currently exists between men and women increases when bonus pay is added into the mix.

The study, which followed 11,000 exempt new hires – both male and female – who worked for the same company from the quarter of 2010 to December 2016, found that, on average, men earn $15,000 more in base salary than women do, which is a 17% discrepancy. When bonus pay is included, bonuses for men are 69% greater, widening the overall pay gap to 19%.

Among age groups, women ages 20 to 30 who were paid a low starting salary were actually near the same pay range as their male counterparts, but, after six years, the gap grows larger. When bonus pay is factored in, women took home 21% less in bonus and base pay. In the 40-to-50 age group, women who began their careers with virtually no gap in base salary saw their pay keep up with men’s pay during the six-year period. But when bonus pay is included, that is when the gap grows.

The largest pay discrepancy in this age group occurs where base incomes are from $40,000 to $60,000. Women receive only an average bonus of 8.5%, compared to 11.4% for men, resulting in a 74% gap.

The only bright spot in the study is that, among various industries, women in the information sector earn 7% more in base salary and bonus than men do. The industries with the largest pay gap – with or without bonus pay, according to ADP – are finance and real estate, at 21%.

“We’re looking at pay equity in a very unique manner,” ADP Research Institute Co-Director Ahu Yildirmaz said in a statement. “By studying both salary and bonus pay between genders at the time of hire and after six years of tenure within the same firms, we found that the overall pay gap between men and women worsens due to disparity in bonuses. Additionally, while it has been believed part of the wage disparity is due to women assuming the role of family caregiver and therefore prompted to leave the workforce, the findings show there is minimal evidence women are more likely to quit their job compared to men.”

Gender discrimination can take many forms, including how base pay is determined and how bonus pay is given out. If you believe you have faced gender discrimination or harassment by your employer or have not received the proper financial compensation for your work performance, contact an experienced New York employment law attorney who can ensure that your rights are protected. Call Steven Mitchell Sack, The Employees Lawyer™ at (917) 371-8000 or email him at sms@StevenSack.com.

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