Equal Pay and Gender Gap Reporting

Equal pay law applies to all pay during employment, including pension, working hours, overtime and bonuses. 

Employees, workers, apprentices, agency workers, temporary employees are all covered. It also applies to self-employed people who are hired to do work personally.

Men and women must be paid equally for ‘equal work’. A claimant must compare their pay and contractual terms and conditions against someone else. The comparator must:

• Be of the opposite sex
• Work for the same employer
• Do ‘equal work’

A comparator can be multiple people, as well as ex-members of staff.

‘Equal work’ encompasses: 

• ‘Like work’: the same or similar job and skills
• Work rated as ‘equivalent’: usually using a job evaluation against another role
• Work of ‘equal value’: work that is not similar but is of equal value because of the skill, responsibility or demands of the working conditions

To successfully defend an equal pay claim, an employer needs to show that:

• The work is not ‘equal’; or
• The difference in pay between the comparators is attributable to a justifiable material factor unrelated to gender, for example a difference in qualifications, skills, or location

For the most part, claims for equal pay at the employment tribunal must be brought within 6 months of the end of the relevant employment. 

Equal pay is a complex area to navigate, and can involve significant compensation awards. Our employment law experts can provide assistance with grievances relating to equal pay and/or throughout the tribunal process.

By law, employers must not pay an employee less, or give them less favourable terms and conditions, because of their disability, race, religion, sexual orientation or another ‘protected characteristic’.

Employers should follow best practice to avoid equal pay issues by:

• Having an equal pay policy
• Having up-to-date job descriptions and titles reflecting work performed
• Having consistency with levels of pay and terms and conditions 
• Performing an equal pay audit or review. Find out more from the Equality and Human Rights Commission here

The workplace trade union or employee representatives should be consulted when carrying out an equal pay audit and deciding how to resolve any unequal pay issues.

Employers with more than 250 employees are required to publish on their website payroll data taken on the ‘snapshot’ date each year, and are encouraged to produce supporting notes and an action plan to combat gaps in their staff structure and payroll. Figures also have to be reported to the government via their website here.

For private organisations the ‘snapshot’ date is 05 April, and figures must be published before 04 April of the following year. For public authority employers, the ‘snapshot’ date is 31 March, and figures must be published before 30 March the following year. 

Employers are required to report:

• Proportions of males and females in quartile pay bands
• Median gender pay gap using hourly rates
• Mean gender pay gap using hourly rates
• Median bonus gap
• Mean bonus gap
• Bonus proportions of male and female employees

Should employers fail to report, the Equality and Human Rights Commission can take enforcement action. Therefore, it is important to make timely reports as non-compliance can affect an employer’s reputation and may also support an equal pay claim made by an employee.