PAYnotes on the gender pay gap and the National Minimum Wage

In November, I wrote a blog on the ‘Gender Pay Gap’ following the publication of the ONS provisional results of their annual survey of hours and earnings and the UK’s ‘Equal Pay Day’. This week, the issue was pushed to the top of the agenda for the Government.

Reporting on the gender pay gap to become mandatory 

Whilst the gap is closing, it is happening painfully slowly. Currently the hourly full-time earnings (excluding overtime) for women is still 9.4 per cent lower than it is for men.

To try to speed up the movement, the government agreed to the amendment of the Small Business, Enterprise and Employment Bill requiring all companies with over 250 employees to reveal differences in average pay for male and female workers. Firms not complying could face fines. 

The Equality and Human Rights Commission (EHRC) is the body responsible for equal pay and its role includes publishing guidance on designing pay systems that are more likely to be fair. The EHRC welcomed the decision by the government to make the reporting mandatory.

This is now going to affect a large number of organisations in the UK and could come into being within 12 months. The only real way to know if your pay system is fair is to conduct an equal pay audit and the EHRC has set out five clear steps in the process.

Having a robust job evaluation scheme in place, will help to make your audit a lot easier. However, whether or not you currently have a scheme in place Paydata can help by conducting an audit on your behalf. 

In May, we are planning to hold a seminar on equal pay and audits, so if you think you would like to come along or talk to us about this issue in more detail, please call us on 01733 391377. More details on the seminar will follow shortly.

By Charlotte Cameron

Proposed increases in the National Minimum Wage

The Low Pay Commission (LPC) has submitted a recommendation to Vince Cable, Secretary of State for Business, Innovation and Skills, for increases to the National Minimum Wage (NMW) rates to apply from this October. The proposals include a 3 per cent increase for the adult NMW, taking it to £6.70 per hour.

If accepted, this would mean the largest increase in real terms since 2007. It is estimated that it would also increase NMW to its highest value relative to general pay levels. Similar levels of increase are proposed for the NMW for young people and apprentices.

Whilst the government isn’t duty bound to follow the LPC’s recommendation, historically they have done just that.

By Peter Brown