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The concept of equal pay for equal work is well established, having been introduced into law by the Equal Pay Act 1970. The governing statute is now the Equality Act 2010.
There are three kinds of equal work, namely:
Equal pay is a day one right afforded to employees, workers, apprentices and personal and public office holders, whether they have a full time, part time, fixed term, zero hours or casual contract. It applies to all contractual terms which include non-discretionary bonuses, overtime rates and allowances, performance-related benefits, severance and redundancy pay, access to pension schemes, benefits under pension schemes, hours of work, company cars, sick pay, fringe benefits such as travel allowances and benefits in kind.
Conducting an equal pay audit allows you to systematically review your organisation’s pay data to assess whether employees are being compensated fairly or if certain groups are being treated more favourably than others.
During an audit, employers can analyse various factors that may contribute to pay disparities, such as start dates, contracted hours, regional allowances, and other material factors, and then taking positive steps to eliminate instances of unjustifiable unequal pay. It’s important to note that any differences in pay must be justified by legitimate reasons unrelated to sex.
Conducting an equal pay audit is a valuable investment of time, offering several important benefits for organisations which include:
The Government has made it mandatory for private sector employers, including schools, with over 250 full-time equivalent employees, to report gender pay gaps within their organisations. Whilst there are no specific penalties, non-compliance may amount to an “unlawful act”, enabling the Equality and Human Rights Commission to enforce any failure to comply.
As the data is publicly available, organisations should consider the reputational damage that could result from the failure to comply, as well as potential implications for recruitment.
Mandatory reporting has highlighted a wider and serious issue of equal pay structures. Even if pay gaps are narrow, the risks, when applied across large groups over the last six years (the claim limit), can be significant.
Proactive steps are crucial to identify and address equal pay issues and then take steps to minimise potential claims and prevent future liabilities. ESP Solicitors offers a fixed-fee Equal Pay Audit & Advice service designed to:
In addition to the Equal Pay Audit, ESP Solicitors offers supporting services to minimise risks.
Expert guidance on implementing necessary changes, such as pay structure reforms, and assistance in creating a manageable roll-out programme.
Robust support in the event of any claims made against you by staff.
Assistance in crafting effective employment policies, including job roles and pay structures, grounded in objective criteria, future-proofing against liabilities.
Advice on communicating changes in job roles, grades, or pay to employees, ensuring a legally compliant and empathetic process.
Contact us today to safeguard your organisation and foster fairness and equality in your workplace.
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