Equal pay

Author: Sue Milsome

Summary

• Employers that do not give men and women equal pay for equal work risk being the subject of tribunal claims for equal pay, causing low employee engagement and retention, and failing to attract the best candidates to the organisation. (See The business case for equal pay)
• The first step to becoming an equal pay employer is for the employer to conduct an equal pay audit. (See Equal pay audits)
• Employers conducting an equal pay audit should inform employees that the audit is taking place and about the purpose of the audit. (See Inform employees about the audit)
• The first step of an equal pay audit is for the employer to assemble information about the organisation's roles and pay arrangements. The employer could instruct an equal pay consultant to assist with the audit, and should involve managers and trade union or employee representatives. (See Step one: Gather information)
• The second step of an equal pay audit is to determine which jobs are equal. (See Step two: Determine which jobs are equal)
• Once the employer has determined which jobs are equal, it should calculate whether or not there are gaps in pay for equal work. (See Step three: Identify pay gaps)
• If an equal pay audit reveals that the organisation is not giving equal pay for equal work, it should determine whether or not this is due to sex. (See Step four: Determine the causes of pay gaps)
• An employer that discovers unequal pay for equal work in its organisation should make a plan to provide equal pay. It should consider changing its pay-determination processes, introducing an equal pay policy, monitoring pay between equal pay audits, and training line managers to make decisions that do not discriminate on the basis of gender. (See Step five: Develop an equal pay action plan)

Overview

This section of the HR & Compliance Centre good practice manual discusses the business case for equal pay. It identifies the causes of pay differences for equal work, explains how employers can identify and remedy pay discrimination in their organisation, and sets out the steps that employers can take to prevent pay discrimination from arising.

This guide deals with equal pay between men and women. Employers should apply the same principles to all employees with characteristics protected under the Equality Act 2010.