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Annie Hayes

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Running scared of an Equal Pay Review?

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Money

An Equal Pay Review need not be scary – and might save you money down the line. The interim findings of the Women and Work Commission were that, despite the Equal Pay Act, measures are needed to plug a pay gap which is more than 40% for part-time workers and 18% for full-time employees; Tom Blass Editor of sister site BusinessZone looks at the issues.


While the report does not however make any concrete recommendations (these will not be made until later in 2005), the commission recognised that there are many influences on the gender pay gap and its size which extend beyond the workplace into education, social attitudes and aspirations.

It is highly likely that many companies are reluctant to conduct equal pay reviews because they’re scared both of what it might cost and what they might find.

But consultants say that it is highly unlikely they’ll discover individual pay differences of 18%.

HR consultancy DLA argues that “Figures as high, and higher, than this for gender pay differences stem from analyses of the whole of an organisation’s male/female workforce pay – and are a result of more women being in jobs that are at the lower end of the organisation structure while, conversely, men dominate higher paid senior executive jobs – almost exclusively in some organisations.”

Ergo, it argues, an “equal pay review” should extend to issues such as: recruitment policies, progression and promotion arrangements, training and development opportunities and overall organisation structuring.

Derek Burn of DLA Piper Rudnick, author of Pay Audit – Equal Pay Reviews and Beyondtold AccountingWEB that while equal pay reviews are not yet compulsory, the final recommendations of the Women at Work Commission may well be that they should be.

Burn said the worst offenders were “stuck-in-the-mud” industries such as manufacturing, heavy industry, and smaller employers. He said that some clients he has worked with “simply have no understanding” of what equal work and equal value mean. “Many a manager doesn’t understand what the law says about equal value. People don’t realise that a comparison can be made between different kinds of work”

This, says Burn, is why companies should undertake an equal pay review – and a job evaluation: “It doesn’t have to be a big deal.” Cost and time wise, Burn says that in a company of 100 employers, such a review would take around a month and cost no more than £5000.

Even large firms, says Burns, should be able to complete a review in two to three months – and the results are seldom crippling: “There are seldom any big surprises – on average, we’ve found applying the recommendations of a review would lead to a rise in the total pay bill of around 6%.”

Not such a big cost compared to what the National Health Service faces – outstanding equal pay claims by social and care workers of around £300 million.

Burn points out that anyone can now go to the DTI’s website and pick up an Equal Pay questionnaire, and challenge their employer to prove that they’re being given equal pay. And he says, it’ll be cheaper now than if it ever becomes compulsory.



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Annie Hayes

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