What employers need to know about equal pay

Men and women graphic


What employers need to know about equal pay: In the modern workplace, where sex or gender should be inconsequential to an employee’s opportunities; equality in pay is an issue that cannot be ignored. All employees, whether male or female, are entitled to receive equal pay for equal work. This means that if a female employee is performing work of equal value in skill or ability to the work of a comparative male employee, she is entitled to receive a wage that is equal to that of her male counterpart.

Last year legislation was passed forcing employers with over 250 employees to publish a gender pay audit every year. That has shone a spotlight on the issue and high profile cases such as the BBC’s Carrie Gracie this week have generated a lot of media coverage. 

Job roles do not always have to be the same to be considered for equal pay. They can be:

  • “Like work” – the same or broadly similar work where any differences are not of practical importance;
  • “Work rated as equivalent” – work which could be different in nature, but which has been rated under a job evaluation scheme as being of equal value.
  • “Work of equal value” different work but of equal value in terms of factors such as effort, skill and decision making.

If an employee does choose to claim, it is up to them to find a comparator of the opposite sex that can be proven to be both carrying out work which falls into one of the above categories and is receiving a higher wage. 

When facing a pay claim such as this, employers must be able to provide evidence that the discrepancy in pay is due to a material, non-discriminatory factor such as experience or knowledge, and not based on the employee’s sex, if they wish to successfully defend themselves.

If an employer is found to have given an unfair wage to an employee based on their sex or gender, and the employee successfully claims, the employer could be forced to not only increase their wage, but also provide back pay for up to six years. Claims can be made to Employment Tribunal within six months of termination of employment which is double the time limit for most other claims.

Whether deciding wages, promoting or even recruiting employees, employers should remember to remain vigilant about the way they treat their staff.

  • Ensure pay/opportunities are based on merit
  • Ensure comprehensive records of pay are kept
  • Don’t assume that because roles are different, that they cannot be deemed as ‘like work’
  • Conduct a brief review now to avoid claims
  • Keep all company policies under review.

*Kate Palmer is Assistant Head of Advisory at Peninsula which provides professional services to small businesses across the UK.

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