Pay & Benefits

Equal Pay

Clare Parkinson

blog-publish-date

03 Jun 2019

blog-read-duration

The concept of equal pay for equal work has existed for decades. It’s based on the idea that men and women doing the same, or similar, jobs should receive the same pay.

In theory, the employer-employee relationship is straightforward. You hire someone. They work. You pay them. Simple, right?

Unfortunately, there are still ongoing issues relating to equal pay for women in the workplace. So much so, the government introduced the gender pay reporting legislation that requires employers with 250 employees or more to publish their calculations showing the gap in pay between men and women in their organisation.

This piece addresses issues relating to equal wages in the workplace. We highlight the equal pay laws in the UK, offer advice on conducting an equal pay audit and explore how you can remain compliant with equal pay legislation.

 

What is equal pay?

It’s your staff’s entitlement to receive the same pay as someone of the opposite sex doing the same or similar job under the equal pay act.

It’s worth noting, this doesn’t just apply to pay. You’re required to give them the same treatment in the terms and conditions of their employment contract if they do the same or equivalent work.

According to the guide from ACAS on equal pay, you must provide ‘equal terms’ across all aspects of pay and benefits. This relates to staff:

  • Basic pay.
  • Overtime rates.
  • Holiday allowances.
  • Hours of work.
  • Performance-related benefits.
  • Access to pension schemes.
  • Non-monetary terms.

A popular equal pay myth is that it’s the same as the gender pay gap. This is not the case.

While paying women and men differently for doing the same job (equal pay) is illegal, having a gap between the average pay for men and women (gender pay gap) isn’t.

The equal pay act in the UK doesn’t include a legal requirement regarding equal pay for equal work for the same gender employees.

However, staff members may file a discrimination claim if discrepancies in pay between themselves and a co-worker of the same gender relates to any of the protected characteristics.

 

Equal pay laws

The main legislation relating to equal pay for equal work in the UK is the Equality Act 2010.

It requires you to give men and women the same treatment in terms of the terms and conditions of their employment contract. They’re required to do this if employees of both sexes perform:

  • The same or broadly similar job.
  • Work rated as equivalent.
  • Work considered being of equal value in terms of effort or skill.

But what is the equal pay act? The Equality Act 2010 superseded the Equal Pay Act of 1970. It aimed to prevent unfavourable treatment between men and women in terms of pay and the conditions of their employment.

 

How is equal pay calculated?

It’s not possible to calculate equal pay.

You can, however, conduct an equal pay audit to ensure your system of payment is one that delivers equal pay. It also helps to protect you from the risk of discrimination claims and the repercussion of being in breach of employment law.

 

Why is equal pay important?

As well as being a legal requirement under the Equality Act 2010, providing equal pay for the same job is an essential step on the route to fairer workplaces in the UK.

Pay inequality applies disproportionately to women during their working lives. It has immediate and long-lasting implications for the individual—and across society as a whole.

Standards of living are restricted and reduced levels of pension contributions lead to a higher rate of relative poverty later in life.

 

Making a claim

Before making a claim to an employment tribunal, employees can first write to you to requesting information to help them establish if they’re indeed underpaid and if so for what reason.

If you aren’t able to resolve this issue internally, your employee can then go on to complain to an employment tribunal.

As per the equal pay claim time limit, employees can make a claim while they’re still in your employ—or up to six months after leaving the organisation to which the claims relate.

Before approaching an employment tribunal for an equal pay claim payout, employees must contact Acas first a free early conciliation between both parties.

If they’re still unable to resolve this issue, Acas then passes the case on to the employment tribunal. If conciliation does occur, it may extend the time limit for making claims. This is to allow for the commencement of conciliation.

After deliberation by the tribunal, they may decide on equal pay claim settlements if they find sufficient grounds for compensation.

 

Expert advice

Contact Croner today for help creating an equal pay audit template or completing a pay audit. Our team of specialist are on hand to test the fairness of your company’s wage system and highlight any areas of concern. Call us free on 0808 145 3380.

About the Author

Clare Parkinson has over 20 years’ experience in the Croner Reward business. As Business Manager, Clare leads a team of Reward Consultants who specialise in the delivery of pay and grading related advice, including tailored pay benchmarking and gender pay reports.

Over the years, Clare has contributed to various industry publications on topics such as gender pay, executive remuneration and market pay trends.

Do you have any questions?

Get a free callback from one of our regional experts today