According to the latest government statistics, the gender pay gap in the UK is at its lowest level ever – 18 per cent. However, even at this level, it doesn’t take a mathematician to surmise that nearly one in every five women is not being given equal pay to men.
Unequal pay between the genders has been illegal since the introduction of the UK Equal Pay Act in 1970. However, the truth is gender pay gap analysis is a rather blunt tool to use – rectifying a gender pay gap requires a more structured approach.
A decreasing gender pay gap since 1970
The reason is not as simple as men simply being paid more than women as the case may have been in previous decades. In that respect, great strides have been made to even out the disparities in the equality of pay.
However, traditionally women are more likely to go into professions that are less financially driven, such as administration, teaching, nursing, and other caring professions. Historically these professions are less rewarding on a financial level, even as you work up the pay grades.
Also, due to women being more likely to be the primary caregiver for children in families, it is more common for them to take on part-time or job-sharing work or occasional agency work, which fits around looking after school and nursery times.
The government has put into place certain recommendations to ensure organisations (including the public sector) introduce equal pay policies. Meanwhile, private companies can do much to help redress the imbalance and establish payment structures that guarantee equal pay for equal work across the gender spectrum.
Understanding whether or not your pay structure is indeed equal, and where the gaps truly are, will require you to implement an equal pay audit.
What is an equal pay audit?
As an employer, if you employ 250 or more people, you are obligated to publish your Gender Pay Gap figures. However, the results won’t tell the whole story. An equal pay audit helps identify those areas that need addressing as part of an overall review.
The Equality and Human Rights Commission (EHRC), which is responsible for overseeing the implementation of the revised Equality Act 2010 (an updated version of the 1970 act), has set out specific guidelines for companies going through this equal pay audit. These five steps are as follows:
- Decide the scope of the equal pay audit
- Determine where people are doing equal work
- Collect and compare pay data
- Establish the causes and any justifications for significant pay gaps
- Develop an equal pay action plan
There are many complexities to establishing pay equality across an organisation, and it is not as simple as paying one person the same as another. Some schools of thought claim that women do not do themselves any favours by not pushing themselves forward enough, particularly in a more male-dominated environment. This view, however, could be considered outdated and does not generate a valid platform for change on a wider level. More needs to be done to establish primary areas where equality of pay is unbalanced but can be reverted simply by implementing new policies.
Generating an environment of equal pay for equal work
Through running an equal pay audit, you can identify the three primary building blocks that will form the foundation of your equal pay policies with the aim of closing (and ultimately eliminating) any gender pay gap. These building blocks clarify how to measure equality across the various functions and job roles within your workplace.
This compares the actual duties performed, which may be similar at certain levels of responsibilities. Two people may have different job titles and perform different functions. Still, the level of the work is at a similar point regarding responsibility and value to the company.
Work rated as equivalent
An equal pay audit will enable you to create a job structure in which different functions are compared and graded to ensure consistency across an organisation.
Work of equal value
While many organisations will already have pay schemes and structures in place, evolving needs, changing technologies, and growth in sales all have an effect on the framework of these structures. It may be that you offered incentives at certain times or implemented pay rises in some areas to retain some people while neglecting other areas. An equal pay audit will highlight areas in which you have inadvertently widened the gender pay gap, and this will need addressing.
Undertaking an audit to ensure you fulfil your equal pay obligations is not just a statutory requirement. It also ensures you are meeting your moral obligations to your employees and will help protect you against any potential claims for discrimination in the future.
Contact us for further guidance regarding undertaking an equal pay audit.