Are You at Risk of Equal Pay Claims?

Are You at Risk of Equal Pay Claims?

The 25th September 2017 heralded the start of National Inclusion Week: an annual campaign to raise awareness of inclusion in the workplace and the benefits employers can reap by having a diverse workforce. 

Gender diversity is one area of inclusivity that is consistently hitting the headlines. Just this week a joint study released by the Chartered Management Institute and Xpert HR highlighted the discrepancies in gender pay in management roles.

The study analysed payroll data of 100,000 individuals in over 400 organisations.  The findings revealed a larger gender pay discrepancy than initially expected, particularly for women in managerial roles.  The study concluded that male managers, on average, out earn their female counterparts by £11,606 per year.  The report highlighted that male managers enjoy more generous overall remuneration packages, including better commission plans, bonus schemes and additional benefits.  Even within the HR profession, a sector, which one believes would be leading by example; there was a substantial gap between the reward packages given to female HR managers in comparison to male HR managers.

With internal differences between male and female staff leaving an organisation at risk of equal pay claims and the associated reputational damage, HR should ensure that reward practices are not ad-hoc or likely to lead to unconscious bias. Here are some top tips for addressing equal pay gaps within your organisation:

  1. Undertake an equal pay audit, utilising your payroll data to identify areas of risk. This analysis should look at the entire remuneration package of individuals and not purely at salary.
  2. Consider adopting a system of proper job evaluation: utilising an established analytical scheme is often the best way forward.
  3. Ensure that all key stakeholders are represented in any project to bring a new pay structure into place, including unions, staff forums and board representatives.
  4. Ensure that where historical differentials are identified, annual pay review practices do not exacerbate, and instead seek to rectify, the problem. Consideration should to be given to utilising ring fencing where a risk area has been identified.
  5. Where job market forces require you to pay outside of your pay structure, ensure that a formal market supplement policy is in place and consider forming an internal pay committee to consider any uplifts on a case by case basis.
  6. Take equal pay complaints seriously, ensuring that these are handled in a manner that does not leave you open to risk of additional discrimination or victimisation claims.
Emma Renke

Emma Renke

Emma Renke is Head of HR Services within MHR’s Managed Services department. Emma is a non-practicing barrister of 8 years call who specialises in employment law and has previously represented clients in the Employment Tribunal and County Court on over 300 occasions. Emma’s specialist interests are discrimination, TUPE and HR strategic change.

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