Additional action points to achieve equal pay include:
Check starting salaries
Starting salaries cover the amount someone is paid when:
- they join the organisation
- their job changes significantly and its grading is reviewed
- they are promoted to a new job or grade
Establish a clear policy on starting salaries and make sure this is followed consistently.
It is good practice for new appointees to start at the minimum point of the relevant pay scale, unless they meet the criteria for a higher point on the scale.
Be clear about the skills and knowledge a new starter must have to get the job, and how these will influence their subsequent progression in the post.
It is good practice to make written applications anonymous so the people drawing up a shortlist don’t know the gender of the applicants.
Ensure equality in competence pay
Competence pay is where an employee is rewarded for achieving a set level of competence. You need to make sure there is no gender bias built into how you assess competence or implement competence pay. For example, do you include part-timers, temporary or casual staff, or those on maternity or career breaks?
You also need to ensure that all employees have equal access to opportunities to develop the required level of competence. For example, the timing and location of any training should accommodate part-time employees who may have caring responsibilities or those on maternity leave.
Deal with any problems in performance-related pay
Performance-related pay (PRP) is used to reward employees on an individual and team basis against targets or criteria.
This type of pay rewards employees differently for doing the same job, which can increase the risk of unequal pay between men and women.
To address this:
- ensure the criteria for rewarding performance are clearly defined, achievable and fair, for example adjusting for part-time workers
- link performance to a quantifiable, objective target such as sales
- consider also including competence or behavioural skills - target-only PRPs may increase risk of gender bias
Make sure there is equality in bonus payments
A 'bonus' payment is an extra and not part of basic pay. However, contractual bonuses are still defined as pay under the equal pay provisions of the Equality Act 2010 and therefore must not be gender biased.
You may pay bonuses for good reasons, but there is a risk that pay discrimination can creep in. Look at the amount and frequency of bonuses paid to men and women in your organisation over the past year. If there is a tendency for one sex to be favoured over the other, you need to take action by:
- establishing criteria for awarding bonuses, making sure everyone involved in the decision-making process understands them
- ensuring that the bonus is clearly defined, achievable and employees know what they have to do to get it
- checking that any employees excluded are done so for a genuine reason and not because of their gender
Your pay system may have different bonus schemes for different kinds of workers, such as manual and non-manual or collective agreements covering different groups of employees.
This can make it hard to compare different groups or realise the impact of certain allowances on individual pay. As a result, your pay system may be vulnerable to the risk of gender bias and equal pay claims.
Eliminate gender bias from 'working time' payments
If you pay different rates for different shifts, or pay higher rates for working unsociable hours, you need to check that these payments do not favour men over women.
Payments need to be compared, and the value of each type of payment calculated and monitored for gender bias. This is particularly important if you have more than one pay structure and unsocial hours payments differ across the various structures.
To help give women equal access to these payments, consider flexitime arrangements, where employees can choose which hours they work within a set range, or 'annual hours working', where employees work a specific number of hours a year to accommodate any peaks and troughs in the hours they work from week to week.
Limit local managerial discretion over all elements of the pay package
If managers have discretion over how much people are paid, it needs to be centrally and carefully monitored. This is especially important where performance-related elements of the pay package are concerned.
Line managers may not always realise the potential impact of their decisions on pay for men and women and this can lead to unequal pay. The greater the degree of managerial discretion, the greater the risk.
Ensure that anyone involved in making pay-related decisions has a full understanding of equal pay issues. If necessary, send them on a training course or seek professional advice from a body such as Acas.
Consider the effect of market forces
In most organisations, market forces play a part in setting rates of pay, as pay has to be competitive to recruit and retain employees.
You may want to pay one group of workers more than another, even though their work is of equal value, because the 'going rate' for the job is higher. Other examples of market forces include geographical distinctions, such as London weighting or a skills shortage in one job but not another.
In some circumstances, market forces can provide a defence to an equal pay claim, but the scope is limited. You can’t rely on the fact that the market rate suggests that certain jobs usually done by men are paid more than other jobs usually done by women.
In the event of an equal pay claim, you have to be able to show that you had to pay the additional amount to fill the vacancy because of market forces. It might be easier to demonstrate this if:
- you pay the additional amount as a separate market supplement, rather than consolidating it into basic pay
- you record the evidence that led you to pay the market supplement
- you review the evidence and the additional amount regularly to check whether the additional payment is still justified
- you don’t pay the market supplement to new recruits to the role if it’s no longer justified
Carry out an equality impact assessment of any changes
This means analysing the expected outcomes of the proposed changes by:
- comparing pay data from the current and proposed pay structures to check the impact on women and men
- reviewing proposed changes to grading, pay structures and other terms and conditions to identify any gender-related differences
- deciding whether any negative impact on female or male employees is justified and amending proposals if it isn’t
If your organisation is a public body in Wales or Scotland, an equality impact assessment of your policies and practices is likely to be a legal requirement.
While every effort has been made to ensure that this advice is accurate and up to date, it does not guarantee that you could successfully defend an equal pay claim. Only the courts or tribunals can give authoritative interpretations of the law.
Last updated: 08 Sep 2020