Carrying out an Equal Pay Audit

What is an equal pay audit?

An equal pay audit involves comparing the pay of protected groups who are doing equal work in your organisation, investigating the causes of any pay gaps by gender, ethnicity, disability or working pattern and planning to close any gaps that cannot be justified on grounds other than one of those characteristics.

An equal pay audit is concerned with an important, but narrow, aspect of potential discrimination in employment - unequal pay for equal work. It does not directly address other aspects of inequality, such as the glass ceiling, but such aspects - which may well contribute to overall pay gaps between, for example, men and women - may be highlighted by the pay audit.

An equal pay audit is not simply a data collection exercise. It entails a commitment to put right any unjustified pay inequalities and this means that the audit must have the involvement and support of managers with the authority to deliver the necessary changes. It is also important to involve workforce representatives to maximise the validity of the audit and success of subsequent action taken.

Most employers believe that they provide equal pay for equal work, irrespective of whether job holders are men, women, of minority ethnic origin, white, disabled, work part-time…

An equal pay audit is the most effective way of establishing whether your organisation is providing equal pay and rewarding employees fairly in practice, and is an effective demonstration of action to promote equal pay under the terms of the equality duties. It provides a risk assessment tool for pay structures.

The benefits

  • Complying with the law and good practice
  • Identifying, explaining and eliminating unjustifiable pay gaps
  • Having rational, fair, transparent pay arrangements
  • Demonstrating to employees and to potential employees a commitment to fairness and equality
  • Demonstrating your values to those you do business with.

Our 5 step equal pay audit model

This flexible toolkit provides detailed advice and guidance on how to carry out an equal pay audit using the Commission’s recommended 5 step model. The toolkit explains what you need to do at each step, why you do this and guidance on how to do it.

Whatever kind of equal pay audit process you use, the essential features are the same (whatever the size of the organisation and whatever protected groups are included in the audit):

  • Comparing the pay of men/women; minority ethnic/white; disabled/non-disabled staff… doing equal work
  • Explaining any equal pay gaps
  • Closing those pay gaps that cannot satisfactorily be explained on grounds other than one of the protected grounds

The equal pay audit model recommended by the Commission is in five steps:

  1. Deciding the scope of the audit and identifying the data required
  2. Identifying where employees in protected groups are doing equal work
  3. Collecting and comparing pay data to identify any significant equal pay gaps
  4. Establishing the causes of any significant pay gaps and deciding whether these are free from discrimination
  5. Developing an equal pay action plan and continuing to audit and monitor pay

 Flow chart to show 5 step process (Word)

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