Pay parity timebomb carries unlimited risk

The number one priority for HR this week is to take a look at your pay
systems for men and women and be sure your business is operating on a level
playing field.

The penalties for those short-changing women or failing to eliminate pay
discrimination will be severe in future and the damage to an organisation’s
reputation could be too awful to contemplate.

Employers falling foul of the equal pay questionnaires being introduced next
April face harsher compensation claims than first thought (see page one). Under
UK law employers currently have a six-year limit on back pay compensation for
equal pay claims, but respected commentators are now warning this will be
overturned at the European Court of Justice and replaced by an unlimited
approach to compensation – perhaps for the full length of service.

The Government is taking pay bias very seriously following the Kingsmill
Review on Women’s Employment and Pay. Voluntary targets are the current state
of play, but mandatory measures could come later.

The majority of employers do not deliberately discriminate, but HR cannot
ignore this timebomb and delay carrying out pay audits, no matter how difficult
it might be.

Research suggests more than 80 per cent of employers are at risk from equal
pay claims from female staff and the same proportion are not confident that
they pay fairly. To make matters worse, very few managers are trained in equal
pay issues.

Some organisations such as Legal & General and Birmingham City Council
recognise their vulnerability and have taken action already, but they are the

If you think your business may be at risk, do a pay audit now. Look for
gender disparities, perhaps resulting from mergers or acquisitions and, where
necessary, seek help from the CIPD or the Equal Opportunities Commission, which
has produced a five-step Equal Pay Kit.

It’s more than 30 years since equal pay legislation was introduced, yet the
UK’s gender pay gap is still one of the biggest in Europe. Unison calculates
its women members earn an average of 50-60p for every £1 a man earns. The
sooner HR gets to grips with this, the sooner women will feel truly valued in
the workplace.

By Jane King

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