What does “pay equity” refer to in an employment context?

"Pay equity" in an employment context refers specifically to the principle of equal pay for work of equal value. This concept emphasizes that individuals should be compensated equally for performing work of equivalent skill, effort, and responsibility, regardless of their gender or other potentially discriminatory factors. It addresses the gender pay gap and seeks to ensure fairness and equity in the workplace.

This principle is critical in promoting workplace equality and protecting workers from discrimination based on gender. Therefore, organizations that adhere to pay equity are committed to evaluating their pay scales and employment practices, and making adjustments where discrepancies exist to achieve fairness in compensation.

In contrast, the other options relate to different aspects of compensation but do not capture the essence of pay equity. For instance, higher wages for overtime work do not specifically address equal pay for equal work. Performance-based pay adjustments focus on individual employee outcomes rather than systematic equity across genders. Lastly, wages adjusted for the cost of living pertain to economic conditions and do not directly relate to the concept of equal pay for equal value of work performed.