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Equal Pay Day

10 November 2016

Equal pay means that men and women in the same employment performing equal work must receive equal rewards.

The Equal Pay Act 1970 has been superceded by the Equality Act 2010 which kept all of the main provisions.    To help employers check that they were compliant with the provisions of this legislation, the EHRC published its first Equal Pay Review Kit in 2005.   It has now launched an updated, simplified, more user-friendly version of its website to help employers understand what equal pay is, why it matters and how to implement it.  

Individuals who can prove that they do work rated as equivalent, work of equal value or “like work” and who are not being paid equally can bring a claim in an Industrial Tribunal. Where these claims succeed, the cost to the organisation can be substantial, as individuals can claim for up to six years after leaving their job.  In May 2014 the Birmingham City Post reported that Birmingham City Council would have to pay £1.1 billion to cover the cost of equal pay claims and would have to take government loans and sell assets like the NEC Group to do so.  At that time the Council were receiving over 200 calls per month from workers with claims.  

The EHRC website provides toolkits which help organisations to undertake pay audits.  This is the way to check for any anomalies.   A full pay audit can be a resource-hungry project, requiring team members from several disciplines, so as a first step spot checking can help to identify any problem areas.  
The mandatory publication of gender pay gap data may prompt organisations to check that they are paying men and women equally for equal work.   The basis for any equal pay comparison is to determine whether the work is equal, and the best way to do this is to have a job evaluation scheme.   Once a job value is established and those that are equal are grouped, jobholders’ pay can then be compared.   Pay in this context has a wide definition, including bonuses and some benefits.    It is important to check starting salaries as anecdotally men are more likely to negotiate a higher rate than women, and the differential can follow throughout the individual’s career.   Attention to skew in performance rankings will help to equalise resulting pay awards.  

Given the analysis of 100 Best Companies to Work For by Fortune magazine and Great Place to Work, which found that trust is the main component of a great workplace, pay equality is crucial.   Transparency is a feature of high employee engagement – communicating the results of a pay audit which demonstrates equality is hugely reassuring to the workforce.  Employees must be able to trust that their employer is complying with legislation, particularly when it relates to reward and recognition, and this is particularly significant when the social norms of the workforce would consider inequality between the sexes on this issue to be an outrageous injustice.

Denise Keating
Chief Executive, enei

This article was first published by the EHRC

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