Equal pay law is covered by the Equality Act 2010 and the Equality and Human Rights Commission (EHRC) Statutory Code of Practice on Equal Pay. As set out in the Equality Act 2010, men and women in the same employment performing equal work must receive equal pay, unless any difference in pay can be justified by the employer.
The right to equal pay is enshrined in law: men and women must get equal pay for doing ‘equal work’. Equal pay is not just about gender: by law, employers must not pay an employee less, or give them terms and conditions that put them at a disadvantage, because of their disability, race, religion, sexual orientation or another ‘protected characteristic’. This means someone must not get less pay compared to someone who is both the opposite sex and is doing equal work for the same employer.
Equal pay law applies to payment terms and conditions of employment, including:
- Basic salary/wages
- Access to Pension Schemes
- Working hours
- Annual leave allowance
- Holiday pay
- Overtime pay
- Severance and Redundancy pay
- Sick pay
- Performance-related pay, e.g. a bonus that’s in the employment contract
- Non-discretionary bonuses
- Benefits, e.g. a gym membership or company car
Who has a right to Equal Pay?
The right to Equal Pay applies to many different work arrangements, including employees, apprentices, agency workers and even self-employed workers who are hired to personally do the work, (this last one sounds odd but some unscrupulous employers use “self-employed” to pay under minimum wage). It does not matter how long you have been employed or whether you have a full-time, part-time, fixed-time zero-hours or casual contract.
Equal Pay for Equal Work
Some jobs can be classed as equal work, even if the roles seem very different – e.g. a clerical job and a warehouse job might be classed as equal work. There are three kinds of equal work, which are defined by law:
- ‘Like work’ – is the same work or broadly similar. It involves similar tasks which require similar knowledge and skills. Any difference in the work is not of practical importance.
- Work rated as equivalent – will have been rated under a valid job evaluation scheme as being of equal value in terms of how demanding it is. This could be because the level of skill, effort and responsibility needed to do the work are equivalent.
- Work of equal value – is not of similar nature and has not been rated as equivalent, but is of equal value in terms of demands such as effort, skill and decision making.
Justifying pay differences
There is a legal presumption that any difference in pay because of their sex is illegal, however, there are times when different pay rates may differ. Here the employer has to be able to demonstrate what is called a ‘material factor’ explains the difference. A material factor might allow a difference in pay and other contractual terms and conditions.
A material factor must:
- Be a genuine reason for the difference in pay.
- Cause the difference in pay.
- Be significant and relevant.
- Be able to show how each factor was amassed and how it applies to the specific case.
- Not be tainted by direct or indirect discrimination.
For example, the member of the opposite sex, or having a protected characteristic may:-
- Have better qualifications/experience,
- Do unsociable hours as part of their shift,
- Have extra responsibilities.
- They may receive an increase to cover additional living costs, such as living in London
A note on Gender Pay Gap Reporting:
Equal pay and gender pay gap reporting are not the same thing. A gender pay gap is an average difference in pay between men and women, for example across an organisation. Employers with 250 or more employees must publish figures about their gender pay gap.
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