Avoiding Pay Differences
The Equal Pay Act came into effect in 1970. It prohibits less favourable treatment between men and women in terms of pay and conditions.
What does this mean?
What it doesn’t mean is that men and women have to be paid exactly the same exact amounts of money. But, if you’ve got two groups of people doing work which is deemed to be of equal value, then the average of the first group and the average of the second group should be approximately the same.
Give me an example?
An example of this would be a group of cleaners in a school who are predominately female and a group of road sweepers who are predominately male. When you look at the average salary for the cleaners in the schools and the average salary for the road sweepers, is there a significant difference between those averages? If so, this interpreted as a breach of in equal pay legislation because through job evaluation, the work that a cleaner does in a school and the work that a road sweeper does is seen to add to the same value and to require the same skills.
Is there something I need to be aware of?
Equal pay is something that every single employer needs to be aware of, not just large public sector organisations (although they are the ones who currently have to report on their equal pay). It doesn’t mean that you have to pay your staff the same salary. But, it does mean that there shouldn’t be any huge anomalies. If you’ve got three or four women all doing the same job and you have one man doing the same job, the man shouldn’t be paid excessively above or excessively below the women and visa versa.
One of the most regularly cited examples is a board of directors. In many cases, the men are paid significantly more than the women, even the men and women who are doing a job of equal value. This has come to light recently with the BBC and again with Glasgow City Council, where a huge number of women went out on strike after what is now a 13-year dispute over an equal pay claim.
What are the risks?
As an employer, you cannot open yourself up to the risk of a discrimination claims and it’s really important that when you take people on, you look at the work they’re doing and it is objectively evaluated. In larger companies there is often some kind of pay structure with established salary ranges that you can be used to slot people into. It is rare that this exists in smaller companies, but establishing a clear pay framework based on objective criteria is important to mitigate the risks of a discrimination or equal pay claim.
One of the best ways to avoid perpetuating equal pay differences is to avoid asking people what they were earning previously. It’s really important that people are paid for the job that they are doing, not based on the salary that they’ve earned in the past. If you advertised a job at £50,000 and are prepared to pay £50,000 for the right candidate, why would you offer them £40,000 just because they were earning £35,000 previously? Cost saving maybe, but if you have the money and know you have the right person, you will get more loyalty and engagement if you pay them appropriately for the job.
Have a look at what your staff are earning, have a look at it by gender and also have a look at it by age, disability, ethnicity and race. If you’re competing for staff and if you want to be seen