Equal pay is the type of problem that has historically and predominantly been a public sector problem. However, the recent news that Tesco are now facing the largest ever equal pay claim in Britain with possible liability reaching £4billion, is a salutary reminder that all employers must ensure they are compliant with equal pay legislation.
If you haven’t already done so, there’s no time like the present to conduct a pay review to identify any inconsistencies. Hopefully the review will conclude claim risks are minimal, on the basis there are no inconsistencies; this will also put your business in good stead if a claim is made.
In terms of conducting a pay review, employers should look to follow the below steps:
Determine Whether Employees Are Doing Equal Work
Equal work could be either; like work (which is work that is the same or broadly similar), work rated as equivalent under a job evaluation study or work found to be of equal value in terms of effort, skill or decision making.
Compare Pay Between Men And Women Doing Equal Work
Some initial questions to reflect on would be:
Are the basic hourly earnings the same?
Are the total hourly earnings the same?
Do male and female employees receive the same type of benefits – such as bonuses, health cover and other allowances?
Is the total value of the benefits received the same for both genders in this job?
If the review does identify a gap which cannot be justified in law, action should be taken immediately to reduce any liability of an equal pay claim.
When considering if a difference in pay can be justified, it is useful to consider any performance pay or any overtime worked. It is strongly recommended a central record of any pay difference is kept, together with the reasons you believe this difference is justified and any supporting evidence.
If not already in place, it is a good idea to put policies and procedures in place that enable you to establish and maintain equal pay in your business.
For any Employment Law advice call our specialist team on 0800 088 6004.