Equal pay: the basics

As Birmingham City Council settles equal pay claims with thousands of women, we outline the basics of equal pay law and steps employers can take to ensure compliance.

Background

Equal pay is a fundamental aspect of workplace equality, with legislation arising from the 1968 strike by female sewing machinists at the Ford Motor Company plant in Dagenham.

Equal pay ensures that individuals receive fair compensation for their work, regardless of gender. Equal pay legislation is governed by the Equality Act 2010 and ensures that men and women performing equal work receive equal pay.

Equal work

Equal work is defined in three ways:

• Like work, which is work that is the same or broadly similar in nature.
• Work rated as equivalent, which is different work that has been evaluated as equivalent through a job evaluation scheme.
• Work of equal value, which is work that is different but requires comparable demands such as skill, effort and decision-making.

The legislation covers all aspects of pay, including salary, bonuses, overtime rates, holiday pay, pensions, and other contractual benefits.

Exceptions

The legislation allows for differences in pay if they can be objectively justified. For instance, pay disparities may be lawful when based on:

• Seniority/length of service.
• Past performance.
• Geographical reasons.
• Market forces, such as to address skills shortages in specific industries or roles.

Ensuring compliance

Employers can take the steps below to address pay inequalities and ensure compliance on an ongoing basis:

• Conduct regular audits to identify and address any pay gaps.
• Use clear and transparent criteria for determining pay, such as experience, qualifications, and job performance.
• Evaluate job roles to ensure that jobs of equal value are paid equitably.
• Keep detailed records of pay decisions and the rationale behind them. This can be critical in defending against equal pay claims.
• Respond promptly and comprehensively to any concerns or complaints raised about unequal pay.

Employers who intend to review their pay systems should seek legal advice prior to doing so.

Comment

By understanding the principles of equal pay legislation and implementing best practice, employers can create an inclusive workplace where all employees feel valued and respected. Ensuring compliance not only avoids legal risks but also fosters a motivated and productive workforce.

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