Equal Pay Audits in the UK

If you are a company in the UK and have questions regarding equal pay and more importantly, what is required of you by law, we can help. In addition, if you have concerns that you are not compliant with the current gender pay reporting
requirements and you need guidance on how to handle the situation, then please read on.

In this particular article, we’ll cover all the basics regarding how and why you have to perform equal pay audits in the UK.

Equal Pay Audit: The Basics

The UK Equality Pay Act 2010 states that it is unlawful for an employer to discriminate between men and women in the workplace.

This means that men and women have to receive – “equal pay for equal work.” The law also stipulates that it is the responsibility of every employer to ensure that no discrimination takes place and the only way to do so is to perform an equal pay audit.

The concept behind an equal pay audit is that you evaluate the organization to find and fix any potential pay gaps. In doing so, you also contribute to creating a better and more equal
society.

Not adhering to these laws can have legal ramifications and it is in the best interest of every organization to perform regular audits. Moreover, there are additional benefits that we will
discuss in just a moment. But first, let’s delve into how to perform an equal pay audit.

Performing an Equal Pay Audit

An equal pay audit can be divided into several steps.

The process usually begins with you deciding on the scope of the audit. Who will be included in the audit? And in what areas of your organization are men and women doing the same work?

The next step is to collect pay data from all the employees within those areas so you can start the audit. If at this point you find that there are no payment gaps, then the audit is complete.

However, if you do find pay gaps, you are obligated to fix them. Generally speaking, any gaps over 3-5% need to be investigated immediately.

The first step towards fixing a gender pay gap is to identify the causes of the gap. This is the most time-consuming part of the process and can include reviewing your workforce and policies in detail.

Secondly, you need to develop an action plan on how to address the gap in an efficient manner before you start the task of fixing the gap. It is usually advisable to include and inform your employees about the process.

You can perform an equal pay audit on your own, but it can be quite time consuming, and the risk of error is high. Therefore, it’s always recommended that you get help from professionals and use tools that have been designed to make the process as easy as possible.

PIHR is a leading software and services company for equal pay audits in Europe, and we can help you with every step of the process. Contact us today for more information so that we can start setting up a plan for your organization.

Benefits of Performing an Equal Pay Audit

It might feel like performing an equal pay audit is an unnecessary procedure and creates a lot of extra work for the Executive team, but there are in fact many benefits to performing these audits for everyone.

First and foremost, an equal pay audit is a simple way for an employer to make sure their staff is receiving a fair salary for the work they perform. It also gives the employer a detailed overview of how much their staff is making and more importantly, how their salaries have developed over the years.

In addition, the information regarding the organization’s salary structure can be used as a foundation when employees want to negotiate salary increases. It can also help when employers need to recruit new talent and other salary-related issues.

But that’s far from all. In order for a company or organization to be considered fair and transparent, they need to showcase that they are actively working towards equality on every level. By performing regular equal pay audits, an organization will greatly improve its reputation among potential clients and competitors as well as current and future employees.

In other words, equal pay audits not only benefit employees but also the employer and the organization itself.

It’s a win-win-win.

What Does the Law Say?

At this point, you should understand how performing equal pay audits will help lay a solid foundation of transparency and equality in the workplace. Next, we’ll continue by taking a look at what the law actually states.

In the United Kingdom, the Equality Act 2010 enforces equality in organizations, both private and public. The Equality Act 2010 replaced a range of anti-discrimination laws that had enforced equality in the workplace since 1975 but had been determined to be inadequate for the 21st century.

Moreover, similar to all other EU member states, the British Equality Act 2010 is grounded in and has the exact same goals as the EU Equal Treatment Directives which are laws covering equality within the European Union.

This means that in cases where British laws do not give full effect to these rulings, British courts can rely on European Union laws instead.

In short, the act requires equal treatment of employees in private and public services with a few exceptions (see below) regardless of gender, age, civil partnership, race, religion or belief, and sexual orientation. There are also a special set of rules for pregnant women and disabled people that have to be followed.

One of the main goals of this act is to eliminate any and all discrimination in society and to enforce equal pay for equal work for women and men.

It’s important to note that the laws are slightly different for private and public organizations even though the foundation is the same.

Employment that is not included in the Equality Act 2010:

There are certain parts of society that are not included under the act. For example, priests, monks, and other religious figures as well as actors and models. Also, political parties, the staff at embassies, organizations aimed at minorities (for example, cultures, nationalities, ex- criminals, and people with learning disabilities), and places where either the workplace or the nation’s security could be jeopardized are not included.

Who Is Responsible for the Audits?

It’s the responsibility of any executive, CEO, or organization leader to make sure that their organization is equal and that everyone is paid the same for the same work. There are also guidelines to follow that help simplify the process, and even services and tools one can use to make the process as efficient as possible.

Although the laws include the society as a whole and are enforced by the Equality and Human Rights Commission, only organizations with more than 250 employees have to report their equal pay audits in the UK. These reports are called Gender Pay Gap Reporting. For all other organizations, the equal pay audit is for internal use only, but the results have to be saved in case they’re needed in the future.

Note that these rules differ from country to country within the EU.

In other words, if you are managing any type of organization in the UK, you are responsible for the equality within that organization. If you have any questions or doubts about the process, it is recommended that you use an audit service to make sure the job is done correctly.

Using software and services as offered by PIHR, with more than 20 years’ experience in this field, will help you avoid any potential legal implications of having an equal pay gap in your workplace whilst also saving you a lot of valuable time.