Performance & metrics · Updated September 2026
Pay equity means paying employees equally for the same or substantially similar work regardless of gender or other protected characteristics, a distinct concept from diversity hiring, which addresses representation in who gets hired rather than what they’re paid.
A pay equity audit typically runs statistical analysis comparing compensation across employees in comparable roles and levels, controlling for legitimate factors like experience, tenure and performance, to detect unexplained gaps correlated with gender or other protected traits. Findings often trigger pay remediation and are sometimes reviewed alongside the same calibration process used for performance ratings, to prevent bias from compounding across both. India’s foundational equal-pay law was the Equal Remuneration Act, 1976, and equal pay for equal work is also a constitutional directive principle. The Code on Wages, 2019 was designed to subsume that Act and broadens the standard to a gender-neutral “equal pay for equal work or work of a similar nature.” The Code came into force in phases starting November 2025, with some provisions activated and others still being notified through rules, so treat the transition as genuinely in progress rather than fully complete, and verify current status if this matters for a specific compliance decision.
The Code on Wages broadens the standard beyond a strictly male-female framing to a general “equal pay for equal work” principle.
Annually is common, often timed around the increment cycle so any adjustments can be built into that year’s pay decisions.
Not automatically, but it’s a signal worth investigating rather than dismissing, since legitimate explanations should be identifiable and documented if they exist.
See our HR and payroll compliance calendar for related statutory obligations.