Equal pay is moving backward: New research

Equal Pay Day is an annual milestone to raise awareness about the persistent compensation gap that women face in the workplace. New Dayforce research reveals that it’s more critical than ever to take meaningful action.

According to Mind the Gap 2026, the compensation gap between men and women has widened since 2020 and is now 27 cents. In 2025, women earned just 73 cents per dollar that men earned. Rather than narrowing, the divide is moving in the wrong direction.

This reality demands more than greater awareness about the problem. It calls for renewed focus — and a clearer understanding of what’s driving these trends.

Persistent disparities across race and ethnicity

The overall gender compensation gap is now at its worst level in at least six years. Importantly, compensation gaps are even more pronounced when viewed through the lens of race and ethnicity.

In 2025:
 

• Black women earned 58 cents on the dollar compared to white men — a gap that’s gotten worse over the past three years.
• Latinas earned 58 cents on the dollar compared to white men, the same as in 2022.

These figures reinforce a critical truth: pay equity is not a single-issue challenge. Gender, race, and ethnicity intersect in ways that compound inequities. Any meaningful solution needs to address this.

Generational warning signs

Gen Z currently has the smallest overall compensation gap between men and women. On the surface, that’s encouraging. But it’s also the generation that experienced the greatest gap widening in recent years.

While Gen Z women earned 86 cents on the dollar for their male counterparts in 2022, they now earn just 77 cents.

Early career pay trajectories influence lifetime earnings, retirement savings, and wealth accumulation. When gaps widen at the start of a career, they compound over time. Progress cannot be assumed — it should be actively managed.

Why complexity might be part of the problem

When organizations examine pay equity, conversations often focus on intent. But intent alone does not close gaps. In many cases, complexity is the hidden barrier.

Disconnected HR, payroll, and workforce systems make it difficult to gain a clear, real-time understanding of compensation patterns. Data lives in multiple systems. Reporting is manual. Insights arrive after the fact. Leaders are left reacting instead of proactively addressing the problem.

Without a single source of reliable data, even well-intentioned organizations can struggle to sustain progress.

Progress requires ongoing insight

Equitable compensation requires ongoing insight, and that’s why we built Pay Insights directly into Dayforce.

Our Pay Equity dashboard enables organizations to analyze compensation across an extensive amount of data — all within their existing system, without exporting sensitive data to third parties.

This allows leaders to:
 

• Identify potential pay gaps among employees performing comparable work
• Address discrepancies proactively — before they become brand risks
• Align compensation practices with organizational values

The business case for pay equity

Beyond fairness, pay equity is a business imperative.

Organizations that prioritize equitable compensation often see stronger employee trust and engagement, improved retention and internal mobility, reduced compliance risk, and enhanced employer brand. Over time, these factors contribute to greater financial performance and operational stability. It’s clear that pay equity is an important way to help drive sustainable growth.

What’s next

Data-driven transparency builds trust.

At Dayforce, we believe when leaders have the right insights — and the confidence to use them — they can build workplaces where people are paid fairly and can focus on doing the work they’re meant to do.

The findings in Mind the Gap 2026 are clear: the compensation gap is widening.

The question now is whether organizations will treat this moment as a setback — or as a catalyst for meaningful change.

Read the full Mind the Gap 2026 report to explore the data and take the next step toward building a more equitable future of work.