Equal Pay Audits

An Equal Pay Audit compares the pay of protected groups of people who are doing equal work, or work or equal value. The causes of any pay gaps are then investigated, and action is proposed to address these gaps.  
 
Usually, an Equal Pay Audit focuses on gender, and compares the male and female rates of pay. An analysis of other protected groups should also be considered, for example, race and disability. Such analyses can be challenging depending on the available data given the relative size of the groups; however a long term analysis may be revealing. 
 
The approach to an Equal Pay Audit can depend on whether the organisation uses job evaluation. In the event that an analytical, factor based job evaluation system is used to objectivly size jobs, an equal value audit can be carried out. This will look at pay rates for similar size jobs which may be very different in nature. Without job evaluation, an Equal Pay Audit looks at average rates per grade, and per people doing the same job. 
 
Equal Pay Audits are voluntary for the private sector, but more organisations are carrying them out given the increasing number of recent equal value tribunal claims. There is also increased external scrutiny due to legislation – public authorities in Scotland, England and Wales with more than the statutory minimum must publish Equal Pay gaps, and legislation is proposed to require private sector organisations to do the same. 

    Equality and Human Rights Commission’s Guidance on Gender Neutral Job Evaluation Schemes

    Equal Pay

    Michael Kimmel, Ted Talks

    Experience in Equal Pay Audits

    We have substantial experience in conducting Equal Pay Audits, and have worked with Scottish Enterprise, West College Scotland, the Law Society of Scotland and the National Parks to conduct pay audits.

    We have experience in using a range of job evaluation systems, including the Hay Method, Northgate Arinso, and the Scottish Joint Council’s Job Evalution Scheme. 

    We can also assist with the implementation of job evaluation processes to make sure that they are fair, transparent, and that the subsequent design of grading systems is free from bias and capable of providing equal pay.

    THE STEPS TO AN

    Equal Pay Audit

    Scope

    Decide the scope and the data. Consider which protected characteristics will be included, and what information you will need about your staff to understand gaps, such as qualifications, length of service, and time in current position.

    Determine Equal Work

    This will be straightforward if you use Job evaluation. Without job evaluation, you can use grades as a basis for comparison, and compare people who are doing the same jobs.

    Compare Pay Information

    Calculate the gap between the protected groups. You should also consider total reward, and include elements such as bonuses, overtime and holidays.

    Justify the Gaps

    Gaps of over 5% are “significant”; gaps of less than 5% should be monitored. Can you justify significant gaps – Is there a genuine and material reason for the difference in pay?

    Action Plan

    Consider action which can be taken to address gaps, for example, developing a robust system to fixing starting salaries.