Contrary to popular belief, equal pay and the gender pay gap are two different topics.
The gender pay gap measures the difference in average earnings between women and men across a whole organisation. It takes into account salaries and, in most cases, bonuses. Since 2017, any employer with a headcount of 250 employees or more must report and publish their gender pay gap figures.
Equal pay, on the other hand, is a legal obligation that requires employers to give men and women equal pay if they are employed to do the same work. The law on equal pay is designed to ensure that all forms of pay are determined without sex discrimination or bias.
The equal pay provisions are not confined to basic remuneration; it can also include overtime rates, performance related benefits, pension schemes, company cars and sick pay.
How to respond to an equal pay claim
If an employee believes they are not getting equal pay for equal work when compared to a colleague, they may make a claim to the employment tribunal. However, in the first instance, it is recommended that the parties seek to resolve issues informally or through an internal grievance procedure.
If the employee decides to proceed with an equal pay claim against their employer, they would need to choose a colleague they want to be compared with; the ‘comparator’. The employer cannot influence the choice of comparator and the comparator does not have to give their consent to being named in the claim.
The comparator must:
- Be of the opposite sex;
- Do ‘equal work’ (work that is the same, similar, equivalent or of equal value); and
- Work for the same employer (or an associated employer at a different workplace where common terms and conditions apply).
It is important to remember that some jobs may be classed as ‘equal work’ even if they appear quite different. For example, in one particular case the court held that a school nursery nurse and a local government architectural technician had jobs of ‘equal value’.
At this stage, the burden of proof rests on the employee to show they are receiving less pay than a valid comparator doing equal work. The tribunal will consider various factors when assessing the equal pay claim such as any difference in pay and any variations in the respective contractual terms and conditions.
Defences to equal pay claims
If the employee can prove they are receiving less than a valid comparator doing equal work, a legal presumption is formed that assumes the difference in pay is because of their sex. The burden of proof then shifts onto the employer, who must prove that the difference in pay was in fact due to a ‘material factor’ which is not tainted by direct sex discrimination.
For example, someone of the opposite sex who does similar work may get paid more because they are located in an area where the cost of living is considerably higher (i.e., in London).
Material Factors can include, for example:
- Different hours of work;
- Rewarding productivity;
- Geographical reasons;
- Recognising length of service; or
- Recognising additional responsibilities.
These are fact-sensitive and can often be difficult to prove so it is important for the employer to have as much evidence as possible to support their material factor.
If an equal pay claim is successfully upheld, the court may order back-pay for the period the employee was underpaid, going back up to 6 years.
What can employers do?
- To ensure equal pay is attainable in the workplace, it is important for employers to identify whether there is a problem existing within their organisation. This can be done through an equal pay audit to identify risk areas and take appropriate compliance action.
- A transparent pay structure that provides employees with equal pay and benefits will reduce the risk of potentially costly equal pay claims.
- Solutions to the pay gap can also lie in culture changes within organisations, for example by embracing more flexible work in senior roles and reducing bias and discrimination in recruitment, promotions and talent management.
- See here an article published by ACAS explaining in more detail how employers can prevent equal pay issues.