Equal Pay Audits

Insight

Action to Close Gaps

In the previous step, you considered the cause of pay gaps and whether they were due to a genuine material factor which was not connected to sex (or other protected characteristic). If you don’t have any gaps which you are unable to objectively justify, you will still benefit from implementing an Equal Pay Policy which sets out your commitments to equal pay for work or equal value, and how you plan to regularly monitor pay arrangements. A model version of an Equal Pay Policy is reproduced below.  

If you do have gaps which you are unable to justify, or gaps where you don’t know the reason but it could be related to sex, you should then consider action to close the gaps. Actions which might be taken include:

Changing the pay of the lower paid staff

You should plan to provide equal pay as soon as reasonably practicable. This may involve increasing pay, or red circling higher paid staff until the lower paid catch up. It is best to do this in consultation with staff and recognised trade unions, and you may need to manage factors such as perceived loss of status. Note also that red circling cannot be indefinite as described earlier at Stage 4, which considered where pay protection can perpetrate discrimination.

Reviewing pay at appointment

It is worthwhile considering steps you can take to limit discretion in deciding starting salaries. This could be done by having a centralised process and by limiting applicants’ negotiation. If it is necessary to pay a supplement due to market forces, ensure that you document the evidence for paying more. The additional supplement should not be part of the base salary – it should be a supplement which is regularly reviewed, and the employee should be notified that the supplement may not be permanent.

Performance Management

Take steps to reduce the risk that performance related reward is discriminatory. This could include evaluating the impact of performance pay on protected groups, and using objective criteria to assess performance.

Implementing Job Evaluation

The use of an objective and non discriminatory job evaluation process to value jobs is the most effective way of ensuring that you are providing equal pay for work of equal value. However it can be resource intensive, and can also involve the need to change existing salaries, so get the timing right and manage expectations regarding the potential impact on the payroll which can often increase by more than 3%.

Implementing an Equal Pay Policy Statement

The model below is based the model which was produced by a previous iteration of the EHRC, namely the Equal Opportunities Commission:

We support the principle of equal opportunities in employment and believe that staff should receive equal pay for work of equal value regardless of their sex, race or disability.

We understand that equal pay is a legal right under both domestic and European Law.

We recognise that in order to achieve equal pay we must have a pay, grading and benefits structure that is transparent, flexible, based on objective criteria and free from bias.

We understand that to deliver equal pay for our employees it is also necessary to consider all of the causes of the pay gap and that these go beyond discrimination within pay systems.  We recognise that our training and employment practices can impact on people as a result of their sex, race or disability in different ways. In particular we are committed to tackling gender-segregation both horizontally and vertically in occupations across the organisation by removing incidents of stereotyping about skill and capabilities, by changing the culture associated with different jobs, removing barriers to accessing training courses and apprenticeships and promoting a healthy work-life balance.

Our overall aim is to achieve equal pay in employment for men and women, people who are disabled and people who are not, and people who fall into a minority racial group and people who do not. In support of this aim and our commitment to equality, we will:

Work in partnership with trade union representatives;

Monitor the pay system to ensure it is open, transparent, fair and equitable;

Communicate our policy on equal pay effectively to managers and all members of staff;

Respond promptly to any complaints in relation to equal pay; and

Regularly assess and monitor the impact of our pay practices, taking remedial action as appropriate.

We will continue to actively consult with Trade Unions on all employment matters including equalities, will report annually on our progress and review our Equal Pay Statement every four years.

Our [Name Team] is responsible for implementing, monitoring and reviewing the operation of this Equal Pay Statement and ensuring that due consideration is given to the resources required to achieve equal pay.