Organisations should ask themselves 10 questions to evaluate how vulnerable they may be to an equal pay claim, according to consultants Watson Wyatt.
Equal pay is back in the agenda following a report by the Equality and Human Rights Commission (EHRC) on the huge gender pay gap in the financial services industry, the threat of mandatory pay audits contained in the Equality Bill, and a growing list of class actions being taken by public sector workers against their employers.
Watson Wyatt has warned that with equal pay legislation tricky to interpret, processes difficult to develop and attitudes hard to change, many organisations may be leaving themselves open to equal pay claims.
“Equal pay claims, even if groundless, take time and money to deal with, and can sully an organisation’s reputation,” said Ian Milton, a senior reward consultant at Watson Wyatt.
“But this is not just about avoiding legal action. How is employee engagement affected if it is known that gender pay gaps are somehow acceptable? Too often organisations can cite a policy on managing equal pay, only for practice to demonstrate that their managers neither understand nor appreciate the policy.”
XpertHR has a range of FAQs on equal pay, as well as a How to guide on ensuring employees receive equal pay.
Watson Wyatt says organisations should ask themselves 10 questions to consider how vulnerable they may be to a claim:
- Is equal pay a consideration in your organisation’s HR policy?
- Does your HR team understand the implications of current and future equal pay legislation?
- Is equality of pay embedded in the recruitment, retention and engagement policies of your organisation, including monitoring starting salaries by gender?
- Does your executive leadership understand and sponsor the concept and implications of equal pay?
- Do your managers understand the concept and implications of equal pay?
- Does your organisation have a job evaluation scheme?
- Does your organisation believe that the job evaluation scheme can manage the issue of equal pay in your organisation?
- Does your organisation provide guidelines to help managers in performance management discussions and in the allocation of pay increase and bonus awards?
- If challenged, would your organisation be able to justify gaps in base pay and annual bonus between a male employee and a female employee who have the same role and responsibilities?
- Does your organisation have a process to deal with an equal pay claim?