Equal pay audits – what you need to know

In February 2016, the government announced plans to force employers with more than 250 employees to produce an Equal Pay Audit from April 2017.  The regulations are due to come into operation on 1 October 2016 and will require employers to calculate and report on the difference in pay between male and female employees using data from a specific pay period that contains the relevant date (every 30 April from 30 April 2017 onwards).

The draft regulations state employers must disclose the following information;

  • the difference in mean pay between men and women;
  • the difference in median pay between men and women;
  • the difference between mean bonus payments paid to men and women and the proportion of male and female employees who received a bonus; and
  • the number of men and women in each pay quartile.

The information supplied must have a statement signed by someone with sufficient seniority within the organisation confirming the accuracy of the information provided.

The information must also be published on the business’s website and retained online for 3 years.  In addition to this, the information must also be uploaded on a government sponsored website.  A league table will follow in 2018 resulting in businesses being named and shamed.

Employers must give men and women equal treatment in the terms and conditions of their employment contract if they are employed to do:

  • ‘like work’ – work that is the same or broadly similar
  • work rated as equivalent under a job evaluation study
  • work found to be of equal value in terms of effort, skill or decision making.

It is time to ensure that you review your equality policies and your workforce and ensure that you are not unwittingly discriminating in relation to gender through your payroll.  Corrective action should be taken immediately if a review of your pay structure based on the guidance in the draft regulations highlights an issue within your organisation. This may mean new terms and conditions of employment being provided to some employees.

CH Legal are able to assist if you have any queries in relation to equal pay reporting or drafting revised terms and conditions of employment, contact caroline.tomlinson@ch-legal.co.uk or call 0161 745 9170 for more information.