As many of the UK’s national retailers including Morrisons, Next and Asda have recently been involved in equal pay claims from thousands of female employees, we outline the basics of equal pay law and steps employers can take to ensure compliance.
Background
Equal pay is a fundamental aspect of workplace equality, with legislation arising from the 1968 strike by female sewing machinists at the Ford Motor Company plant in Dagenham.
Equal pay ensures that individuals receive fair compensation for their work, regardless of gender.
Equal pay legislation is governed by the Equality Act 2010 and ensures that men and women performing equal work, receive equal pay.
Equal work
Equal work is defined in three ways:
- Like work, which is work that is the same or broadly similar in nature
- Work rated as equivalent, which is different work that has been evaluated as equivalent through a job evaluation scheme
- Work of equal value, which is work that is different but requires comparable demands such as skill, effort and decision-making
The legislation covers all aspects of pay, including salary, bonuses, overtime rates, holiday pay, pensions, and other contractual benefits.
Exceptions
The legislation allows for differences in pay if they can be objectively justified. For instance, pay disparities may be lawful when based on:
- Seniority
- Past performance
- Geographical reasons
- Market forces, such as to address skills shortages in specific industries or roles
Ensuring compliance
Employers can take the steps below to address pay inequalities and ensure compliance on an ongoing basis:
- Conduct regular audits to identify and address any pay gaps
- Use clear and transparent criteria for determining pay, such as experience, qualifications, and job performance
- Evaluate job roles to ensure that jobs of equal value are paid equitably
- Keep detailed records of pay decisions and the rationale behind them. This can be critical in defending equal pay claims
- Respond promptly and comprehensively to any concerns or complaints raised about unequal pay
Employers who intend to review their pay systems should seek legal advice prior to doing so.
By understanding the principles of equal pay legislation and implementing best practice, employers can create an inclusive workplace where all employees feel valued and respected. Ensuring compliance not only avoids legal risks, but also fosters a motivated and productive workforce.
If you have any questions in relation to equal pay, please do not hesitate to contact a member of the AfterAthena team (part of the Napthens Group) who are able to offer 30 minutes of free advice to QCS members.
