Mind the (pay) gap!

Whilst it is 44 years this week since the Equal Pay Act came into force, there is still evidence that the gender wage gap exists; in fact, a recent study by a national newspaper indicates that the gender pay gap remains stubborn and that male and female managers will not be paid the same until 2067.

By Ashna Chada, Employment Solicitor, Taylors

So what are the statistics?

Despite being over four decades since the Equal Pay Act came into force, men still earn more than women in nearly 90% of job categories and recent reports have found that women’s pay in the workplace is again falling behind by as much as 20% when compared to their male counterparts.

According to the research:-

- female health professionals have the biggest pay gap at 31%, which works out at an average of £16,000 a year;

- women working in culture, media and sport experience the next biggest pay gap at 27.5%, which equates to an average of £10,000 a year, and;

- women working in manufacturing occupations earn nearly some 24% less than men.

It's interesting to note that the three major occupations where women do earn more than men – transport drivers, electricians and agricultural workers – are all male-dominated,with fewer than 50,000 women employed in these sectors, compared to 1.5 million men.

An employer's legal position

The Equality Act 2010 outlaws pay discrimination and implies an “equality clause” into every contract of employment and stipulates that a woman (or man) is contractually entitled to equal pay with every man (or woman) in the same employment who is doing like work, work rated as equivalent, or work of equal value, unless the difference in pay is genuinely explained by something other than sex.

If you have female employees who believe they are affected by these issues, you may find that they are unhappy to sit out the 53-year wait and may subsequently raise concerns with you. It is therefore imperative that, as an employer, you anticipate this and check that you are in a strong position to avoid any potential equal pay claims. So here are our recommended action points...

1. Listen to the Law

The Equality Act requires that men and women receive equal pay for equal work. Jobs do not have to be identical for equal pay to be required, but substantially equal in terms of skill, effort and job responsibility, and performed under similar working conditions. The term pay refers not just to salary but also overtime, bonuses, vacation and holiday pay, stock options, life insurance and all other benefits and compensation of any kind paid to employees.

2. Ensure appropriate training is in place for Managers

Employers need to make sure that all supervisors and managers receive proper training on how to avoid wage discrimination.

3 Audit pay practices

Employers should frequently review their pay practices to make sure that they are not engaging in discrimination, for example, because of sex, race, national origin or any other protected class. Any differences that do exist should be based on legitimate and non-discriminatory factors and supported by written documentation.

And watch out for new legislation expected to be introduced in October 2014 on mandatory equal pay audits. Under the proposed new legislation, an Employment Tribunal would be able to order employers that have breached the provisions of equal pay legislation to carry out mandatory equal pay audits.

4. Appraisals

Ensure that appraisals are well-documented so employees are aware of their performance and that you have evidence to support this.

5. Base decisions on skill and performance

Managers need to make sure that all employment decisions regarding promotions, salary increases and bonuses are based on legitimate and non-discriminatory factors such as skill, merit and performance.

6. EOC Code of Practice Familiarise yourself with the Equal Opportunities Commission Code of Practice on Equal Pay (for further information, see www.eoc.org.uk). While the Code is not legally binding, a Tribunal may (and more often than not, do) take into account an employer’s failure to act on its provisions when considering a Tribunal Claim