What is an Equal Pay audit?
Men and women in the same employment performing equal work must receive equal pay. This is set out in the Equality Act 2010 and is a legal requirement.
However, it is not always easy to identify which jobs could be considered as ‘equal work’. An equal pay audit will compare the pay and benefits of men and women doing equal work in your organisation, and identify any instances of unequal pay,
This gives the employer an opportunity to eliminate any instances of unequal pay that cannot be justified.
Equal Pay -vs- the Gender Pay Gap
An equal pay audit is very different to gender pay reporting.
There are a number of legal requirements employers have to fulfil, surrounding both equal pay and the gender pay gap.
These are two separate issues and the infographic below illustrates the differences between the two.
Both are a legal requirement, however it can be difficult to ascertain what ‘equal pay’ is, after all who can decide which jobs are of equal value? This is the purpose of conducting an equal pay audit.
Equal pay is a legal obligation and getting it wrong can be a significant and costly risk for an organisation. Whether you pay for performance or contribution / skills development, it is vital that employers ensure that pay and bonus schemes are non-discriminatory.
An equal pay audit will identify any potential risks and ensure that your pay practices are fair and meet the requirement of the Equality Act 2010.
What is involved in an equal pay audit?
The five steps in an equal pay audit process:
- Decide the scope of the audit
- Determine where people are doing equal work
- Collect and compare pay data
- Establish the causes and justification for significant pay gaps
- Develop an equal pay action plan
While employers can do this in house, in practice, most employers choose an external provider such as 3R to conduct an equal pay audit. We are specialists in this area and have worked with many of the UK’s leading employers.