Pay equity refers to the principle of ensuring that employees receive fair and equal compensation for work of equal value, regardless of their gender, race, or other protected characteristics. It aims to eliminate wage disparities that result from discrimination or bias and promotes a workplace where employees are paid fairly based on their job responsibilities, skills, and experience.

Example
Imagine a company with two employees, Sarah and John, who hold positions with similar job responsibilities, qualifications, and experience. Sarah is a woman, and John is a man. If Sarah is paid less than John solely because of her gender, this would constitute a pay equity violation. To achieve pay equity, the company would need to adjust Sarah's salary to match John's, ensuring equal pay for equal work.