Protecting your business from equal pay claims

Protecting your business from equal pay claims

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Author: Helen Burgess

Equal pay claims are often viewed as the preserve of the public sector but in light of the current class action against Asda this perception is being challenged. We look at how private sector employers can protect themselves from a similar fate.

Is there still a problem?

According to results recently published by the Office for National Statistics the average full time pay gap between men and women is at its smallest since records began in 1997, being about £100 a week or 9.4% based on figures in April 2014 compared with 10% at the same time last year. The gender pay gap for all employees, full-time and part-time, was also the lowest on record at 19.1%, down from 19.8% in 2013.

However, the reason for this seems to be a faster fall in men's wages rather than women's wages rising in any real sense. Analysis of weekly earnings reveals that, overall, pay increased by only 0.1% between April 2013 and April 2014 for new recruits or 4.1% for those employees who were in the same job at the time of both surveys. With retail prices index inflation at 2.3% in October, on this measure pay continues to fall in real terms.

TUC general secretary Frances O'Grady also noted that whilst it was good to see the gender pay gap narrowing again after last year's widening we are only back to where we were in 2012. She also pointed out that nearly six million women work part-time and they earn £5.15 less per hour than full-time men. In addition the full-time gender pay gap widens dramatically for women in their 40s and 50s reflecting the fact that women (in the main) still have to take a step down to access flexible or reduced hours once they become mothers meaning their earnings never recover even when they return to full-time work. Indeed 4 November is still heralded as 'equal pay' day - the day each year from which women effectively work for free until the end of the year in terms of what they can earn in the year when compared to men.

So what does this mean for employers?

Employers should be mindful of the continuing gap in pay between men and women and ensure that they are not exposed to the risk of equal pay claims by taking steps to eliminate such gaps within their organisation.

This will require an equal pay audit to be carried out in order to review pay structures across the organisation, establish whether there are any differences in pay and the reasons for these and where there are differences in pay based on employees' gender to put in place an action plan to address this - for example, by red circling higher earners until the comparators pay is brought in line

It is good practice to take this step now before any equal pay claim is brought since it can exempt an employer from being required to carry out such an audit in the event that they lose an equal pay claim.

Disclaimer

This document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.

About the author

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Helen Burgess

Partner

03700 86 5028

Helen heads the employment team in Nottingham and is well-versed in the specialist area of employment / labour law, advising HR professionals, in-house counsel, directors and managers on human resource and employment law issues. She has particular experience of TUPE advice, tribunals, business immigration, collective and union issues, whistle blowing, settlement agreements & terminations and executive appointment & exits.

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