Equal pay: what should businesses do to address the gender pay gap?

With the issue of equal pay rarely out of the headlines, Coodes’ Employment team explains what employers need to consider.

The Equal Pay Act came into force in 1970. The legislation was put in place to address the issue of women often being paid lower wages than men for carrying out the same work. The latest statistics show that nearly 50 years on, there is still a pay gap of 18% between men and women in the UK.

Over the last few months a number of large businesses and public sector organisations have come under fire for pay gaps between male and female employees. High profile examples include the BBC, Ryanair and Lloyds Bank. So, what should business owners do to ensure they are not at risk of breaching the legislation?

Should businesses be transparent about how much they pay staff?

The law currently says that organisations with 250 or more employers are obliged to publish data on the gap in pay between male and female employees. However, a number of smaller organisations have chosen to share their data too, though they are not currently required to do so. Business owners can find more details on how to report here.

Equal pay for the same work?

The legislation makes it illegal for women to be paid less than men for doing the same work. While this might sound simple, it can be complex. If there are eight shop assistants and the three male assistants are paid a higher hourly rate than their female counterparts, then it is blindingly obvious that their employer is breaking the law. However, it is more complicated if you are comparing different roles. A famous example of this is when school cooks, typically female and often called ‘dinner ladies’, won a Tribunal against their employer. Birmingham City Council was paying its refuse collectors, typically male ‘bin men’, higher wages. The ‘dinner ladies’ won because their union successfully argued the case for their roles being comparable.

The law states that equal pay should be given for work that is the same, broadly similar, or of equal value to the organisation. This can be subjective, so if in doubt seek advice.

So, for any organisation it is important to regularly review its salaries and compare rates of pay for staff carrying out roles at a similar level – even if the work itself is different.

Look at the whole remuneration package

When considering equal pay, it is important not just to look at the hourly rate or annual salary. Employers should be consider the whole remuneration package, including bonuses, performance related benefits and overtime to ensure there is equality among male and female employees. And equal pay does not just refer to money – it also includes annual leave.

What if an employee approaches me about equal pay?

If a member of staff approaches you arguing that they feel there is a gender pay gap in your organisation, the first thing to remember is that it is important not to penalise them for raising the issue. The Equality Act gives employees protection against ‘victimisation’, which means they should be able to make a complaint or raise concerns with their employer without fear of repercussions.

You should clarify with them whether or not they are raising this as a formal grievance – and, if so, go through your usual procedures for this.

Roles change within organisations, and people come and go, so it is important to continually keep track of salaries with the issue of equal pay in mind. Acas has some useful information for employers on equal pay and the Equality and Human Rights Commission has a three-step review for small businesses here.

Our Employment team provide support to businesses helping them keep ahead of recent changes in Employment Law. If you need some friendly advice, call Steph Marsh on 01579 324 017 or send her an email.