Pay and reward

Pay and reward

What equal pay law says

The Equality Act 2010 says that when men and women are doing equal work they have the right to receive equal pay. This means that employers must provide the same pay and conditions for men and women doing work which is:

  • the same or broadly similar (‘like work’), or
  • has been rated as equivalent under an analytical job evaluation scheme, or
  • Work which is different but of equal value in relation to the knowledge, skills, effort and responsibility involved (‘equal value’).

This applies to full-time and part-time employees. This means that any female part-time employee doing equal work to a male full-time employee, should receive the same hourly rate of pay. Providing equal pay also means your staff should know how their pay is made up and should understand, for example, what needs to be done to earn a bonus, and how the amount has been calculated.

An example of equal pay:

Although people can be employed on very different jobs, they may require similar levels of skill, responsibility, knowledge, effort, training and qualifications.

For example, the job of a cook and a plumber are very different, but both require a similar level of training and technical knowledge to carry out their respective responsibilities. If the cook was a woman and the plumber was a man, and it is found that their levels of skill, responsibility, knowledge, effort and so on are similar, they should be paid the same. If one of them had supervisory responsibilities however, that would be justification for paying that job at a higher rate.

How to check whether you are providing equal pay

As pay arrangements are often complex, features that can give rise to unlawful pay inequality are not always obvious. Although not a legal requirement, the most effective way for a business to uncover unequal pay is to carry out an equal pay review. The key elements of equal pay reviews are:

  • Identifying jobs involving similar levels of skill, effort, decision-making, and knowledge (work of equal value);
  • Comparing the pay of women and men doing like work, work rated as equivalent, and work of equal value;
  • Identifying gaps and the reasons that the gaps exist;
  • Develop an action plan to eliminating those pay gaps that cannot satisfactorily be explained on grounds other than sex.

The Equality and Human Rights Commission has produced a range of resources for employers on equal pay including an equal pay review toolkit, and series of equal pay in practice checklists.

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