Equal Pay – what SME employers need to know

Nearly five decades after the debate on equal pay began in the UK, the discussion continues. The Equal Pay Act 1970 was a landmark piece of legislation. It stated that equal pay was due where work was broadly the same and equal in value in terms of effort and skill.

Fast-forwarding to 2018 shows that in some quarters change has been slow at best. Earlier this year, the BBC’s China editor Carrie Gracie resigned from her post, complaining that as an international editor she was being paid 50 per cent less that her male counterparts, despite doing the same job.

With many sectors of the economy reporting skill shortages, employers are more reliant than ever on the knowledge, expertise and commitment of their workforces. In addition, businesses are increasingly being required to demonstrate that they follow good employment practices in order to win and sustain new business.

However, official statistics show that we have yet to get the gender pay balance right; the pay disparity between men and women is currently around 19 per cent.
 

What the law says

Equal pay applies not only to salary, but to all contractual terms of employment, such as bonuses, holiday entitlement, company cars, pension contributions and other benefits such as sickness and redundancy pay. Equal pay applies to both full-time and part-time employees, and all employees have the right to know how their pay package is arrived at.

We would advise all SMEs to commit to undertaking a regular equal pay review covering:

• comparisons of the pay of men and women carrying out the same work, and those carrying out different jobs that require similar levels of skill and knowledge
• identification of any pay gaps
• the elimination of gaps that cannot be satisfactorily explained on grounds other than sex.

It is advisable to review roles across the whole business, comparing say, administration jobs with production jobs to see if they involve similar levels of skills, effort, knowledge and responsibility.
 

What to do if you identify pay differences

It is an employer’s responsibility to make sure its pay system is free of gender bias and not wait until an equal pay claim is made before correcting discrimination in pay.

If you identify pay differences, the first step is to check whether these differences are fair. If you cannot come up with clear evidenced-based reasons for pay differences between men and women who do similar jobs, you could be vulnerable to an equal pay claim.

Businesses should demonstrate commitment to good working practices by having an Equal Pay policy in place. This policy should be included in employment contracts and the staff handbook, and state among other things that the management will undertake regular equal pay reviews to address any instances of discrimination in pay, monitor starting salaries for new staff and provide training for those responsible for making decisions on pay.
 

How we can help

We have a proven track record of helping employers in dealing with workplace challenges and provide guidance as to best practice. So, if you would like to ensure your pay policies and procedures are up to date and compliant, then why not get in touch? Call us now on 0330 221 8855.