Set the right pay rates

Equal pay for work of equal value

The law says that men and women are entitled to equal pay for work of equal value. Pay in this context includes contractual benefits, eg bonuses and pension contributions, as well as basic wages or salary.

Workers have the right to ask their employer for information to help them work out whether they have received equal pay, and if not, why. They can do this via an equal pay questionnaire.

Read about the equal pay questionnaire on the Government Equalities Office (GEO) website - Opens in a new window.

Equal pay tribunal claims

Workers who believe they haven't received equal pay may take the case to an employment tribunal, which may use the information in the questionnaire.

For their tribunal claim to be successful, a worker will need to compare their pay to that of someone of the opposite sex (a 'comparator').

There are laws in place to deal with complex equal value cases and streamline the system and reduce delays on dealing with large and complex cases. There are also restrictions on when a tribunal may move not to consider an equal value claim.

Read about equal pay claims on the GEO website - Opens in a new window.

Ensuring equal pay

To ensure that you are paying your workers fairly, you could undertake a job evaluation. This compares factors such as skills, effort and decision-making involved in a job. With this information, you can determine which jobs are of equal value.

The evaluation must analyse a job by preset factors that apply to all the jobs under evaluation rather than looking at each job in isolation. Avoid basic errors such as assuming jobs that are being done part-time are easier.

With regular reviews of your pay system and by following the code of practice on equal pay, you can build and maintain a robust, fair pay system that stands up to scrutiny and is less susceptible to claims for equal pay.

Read the code of practice on equal pay on the Equality and Human Rights Commission (EHRC) website - Opens in a new window.

Subjects covered in this guide

• Introduction
• Pay-rate systems
• Setting up a new pay-rate system
• Making pay comparisons
• Equal pay for work of equal value
• Reviewing pay rates and systems
• Commission, bonuses, tips and gratuities

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