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Racial Pay Gap

REFERENCE
S1.6.3us (optional)
CATEGORY
Employee Engagement, Diversity, And Inclusion
METRIC
Pay Equality
UNIT
Percentage (%)

Definition

This metric tracks the gross hourly earnings racial and ethnic pay gap, as measured in the last calendar year.

Expanded Definition

This metric tracks the racial and ethnic pay gap by comparing the average gross hourly earnings of employees identifying as White non-Hispanic with employees identifying as Hispanic or Latino, Black or African American, Native Hawaiian or Pacific Islander, Asian, Native American or Alaska Native, or Two or More Races.

Gross earnings are defined as earnings “paid in cash directly to an employee before any deductions for income tax and social security contributions paid by the employee. All bonuses, whether or not regularly paid, are included (13th or 14th month, holiday bonuses, profit-sharing, allowances for leave not taken, occasional commissions, etc.).”

The unadjusted racial and ethnic pay gap is calculated by subtracting the average employee pay for each ethnic and racial group from the average White non-Hispanic employee’s pay and dividing that number by the average White non-Hispanic employee’s pay.

The U.S. EEOC defines an employee as “any individual on the payroll of an employer who is an employee for purposes of the employers withholding of Social Security taxes except insurance sales agents who are considered to be employees for such purposes solely because of the provisions of 26 USC 3121 (d)(3)(B) (the Internal Revenue Code). Leased employees are included in this definition.”

The U.S. EEOC specifies that ”[e]mployment data must include ALL full-time and part-time employees who were employed during the pay period selected by the employer between October 1 and December 31 of the reference year (i.e., workforce snapshot pay period) except employees specifically excluded per EEO-1 reporting guidelines.”

The U.S. EEOC identifies the following race and ethnicity categories:

Hispanic or Latino (A person of Cuban, Mexican, Puerto Rican, South or Central American, or other Spanish culture or origin regardless of race.)

White (Not Hispanic or Latino. A person having origins in any of the original peoples of Europe, the Middle East, or North Africa.)

Black or African American (Not Hispanic or Latino. A person having origins in any of the black racial groups of Africa.)

Native Hawaiian or Other Pacific Islander (Not Hispanic or Latino. A person having origins in any of the peoples of Hawaii, Guam, Samoa, or other Pacific Islands.)

Asian (Not Hispanic or Latino. A person having origins in any of the original peoples of the Far East, Southeast Asia, or the Indian Subcontinent, including, for example, Cambodia, China, India, Japan, Korea, Malaysia, Pakistan, the Philippine Islands, Thailand, and Vietnam.)

American Indian or Alaska Native (Not Hispanic or Latino. A person having origins in any of the original peoples of North and South America (including Central America), and who maintain tribal affiliation or community.)

Two or More Races (Not Hispanic or Latino. Two or More Races – All persons who identify with more than one of the above five races (White, Black or African American, Native Hawaiian or Other Pacific Islander, Asian, American Indian or Alaska Native.)