Avoiding unlawful discrimination when you decide what pay and benefits workers will receive

The next part of this guide looks first at the general rules on avoiding unlawful discrimination when setting levels of pay and benefits. It then explains the specific rules on equal pay between women and men, what to do if someone says you are paying them less than someone else because of a protected characteristic, and the specific rules that apply in equal pay cases in the Employment Tribunal. It covers:

  • Avoiding unlawful discrimination when you decide what pay and benefits workers will receive
  • Who is responsible for a service you give your workers as a benefit
  • Bonuses
  • Occupational pension schemes
  • Health insurance and disabled workers
  • Pay discussions
  • Making sure you are giving women and men equal pay and benefits
  • Sex equality clause
  • Equal work
  • Like work
  • Work that is rated as equivalent
  • Work that is of equal value
  • The employers defence of 'material factor'
  • Pay protection schemes
  • Pay, benefits and bonuses during maternity leave
  • What to do if someone says you are paying them less than someone else because of a protected characteristic
  • What the Employment Tribunal has to decide in an equal pay case
  • Which claims can the Employment Tribunal hear?
  • Time limits
  • Burden of proof
  • Assessment as to whether the work is of equal value
  • What the Employment Tribunal can decide in cases where money is owed
  • Pension cases

There are different ways you might decide what to pay a person and what benefits to provide, such as:

  • the going rate for the job in your sector and/or area
  • the skills and qualifications needed by someone when they do the job
  • their performance in the job.

You must make sure that the way you work out and apply these criteria does not discriminate unlawfully.

Always remember that specific rules apply where pay or benefits are part of the workers contract of employment and women and men are being paid differently. If, for example, the jobs for which you are paying workers at different rates are mainly done by women or mainly done by men.  Read more in Making sure you are giving women and men equal pay and benefits.

Good practice tips for avoiding unlawful discrimination in pay and benefits

  • Make sure you know why you are paying people differently.
  • Check that people who share a particular protected characteristic do not generally do worse than people who do not share it.
  • Use an equal pay audit to check the impact of your decisions on pay and benefits.
  • A transparent, structured, pay system based on a sound job evaluation scheme is more likely to be free of bias than one that relies primarily on managerial discretion.
  • There is useful guidance in part 2 of the Code of Practice on Equal Pay, 'Good equal pay practice'.

More information

Last Updated: 15 Jul 2010