Employer’s Guide to Equal Pay Law

August 12, 20191:33 pm
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Instead of decreasing, the gender pay gap is seen to grow from time-to-time. A report in 2017 on Global Gender Gap revealed that despite the slow but steady progress, 2017 was not a successful year when it comes to reducing the gap. In fact, the gap between men and women across health, education, politics, and economics is widening since records began in 2006. 

Similar to the index, research by Fawcett also found that the gender pay gap could be hard to tackle. Albeit there is real action taken, progress is hard to detect. The condition is worsening as the gap is not only affecting individuals in their professional career but personal life as well. 

See also: New Maternity Law: 1.8 Million Indian Women at Risk of Losing Jobs

What is equal pay?

Equal pay is about men and women in the same employment performing equal work must receive equal rewards. It has been cited in Equality Act 2010 Law that: “The Act implies a sex equality clause automatically into all contracts of employment, ensuring that a women’s contractual terms are no less favourable than a man’s”. The equality of terms include:

  • all the basic pay,
  • non-discretionary bonuses,
  • overtime rates and allowances,
  • performance-related benefits,
  • severance and redundancy pay,
  • benefits under pension schemes,
  • hours of work,
  • sick pay,
  • fringe benefits such as travel allowances, and
  • benefits in kind.

Equal pay is an integral element in the implementation of employment equity. It must be included in any undertaking by employers to make the practices in the workplace more equitable. Besides, equal pay will not only benefit individuals and employers but society as a whole. For instance, you can increase efficiency and productivity which will result in attracting the best employees, reducing staff turnover, increasing commitment, reducing absenteeism, and boosting company reputation. 

Moreover, equal pay is not a one-off exercise. It should be checked regularly and an ongoing business objective. To do this, financial matter alone is not enough, you should also spend time and resources. So, how does the employer keep equal pay in check? Adapted from the Equality Act 2010 law, here are ways that help for employers.

1. Carry out an equal pay audit (for large employers) and equal pay review (for smaller employers)

You should be able to identify what issues that cause and potential cause of the future unequal between men and women at work. And for issues that cannot be justified, you need to take action to ensure your legal obligations regarding underpayment which also reduces your risk on an equal pay claim against you.

2. Understand the law about terms and conditions of employment 

Cited from the Act 2010, the law on equal pay implies a sex equality clause into employees contract of employment, ensuring that their contractual terms are no less favourable than men and vice versa. This, however, not only applies to pay but to all contractual terms of employment such as bonuses, holiday entitlement, etc. It also applies to all employees, including full-time, part-time, casual or temporary contracts, regardless of the length of service.

3. Develop an equal pay policy

Next step is you should produce a document that commits your organisation to equal pay through an explicit equal pay policy. What should I include in the policy? Generally, equal pay policy should cover these areas.

  • Policy statements by a written statement that clearly emphasis on the commitment to tackling sex discrimination and providing equal pay.
  • Definitions by providing a clear and understandable definition of all items used in equal pay policy. Do include pay, equal work, and employee in your definitions.
  • Objectives and actions needed to be taken in tackling sex discrimination and providing equal pay. Describe all the action in a precise and concise way.
  • Complaints by setting how you will respond to any concerns and complaints about possible breaches of equal pay policy. You can also include details of any grievance procedures that employees should follow.
  • Monitoring by including a statement that you will regularly review the policy and assess your progress in delivering an action plan.
  • Responsibilities by identifying all those involved in the implementation of your equal pay policy such as employers, managers, employees, etc.
4. Monitor equal pay rigorously

When you have built equal pay policy, you should continuously review and monitor how your pay system works in practice. Do pay attention to the following problem areas:

  • starting salaries on entry to organisation and grades: don’t import pay discrimination from elsewhere,
  • rates of progression whether men and women are progressing equally, and
  • performance-related pay that is clearly linked to a defined level of performance.

Likewise, during the monitoring, pay attention to other equality issues that might slow your equal pay commitment.

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