The Hidden Costs of DEI Work: Understanding Identity Taxation in Contemporary Organizations

Abstract

Investments in Diversity, Equity, and Inclusion (DEI) initiatives are critical for organizations’ productivity, innovation, and talent retention. However, the responsibility for leading these efforts often falls disproportionately on employees from traditionally underrepresented groups, creating what is known as identity taxation—the additional labor placed on these individuals beyond standard job expectations. This phenomenon manifests when women and racialized individuals are expected to lead DEI initiatives, manage diversity-related issues, and support minority colleagues, often without formal recognition or compensation. This chapter examines how identity taxation manifests in contemporary organizations, discusses its career implications for those who bear this burden, and provides recommendations for creating a more equitable distribution of DEI responsibilities across the entire workforce to build truly inclusive workplaces.