Equal pay and gender pay issues are not the same thing. The former involves the entitlement of employees to receive pay on par with comparable workers of the opposite sex. Gender pay looks at the difference in average wages within an organisation.
A gender pay gap may, or may not, be indicative of pay inequality as there are many factors that influence wages within an organisation. Not all factors that result in female employees receiving different wages are due to sex discrimination.
Employers are legally required to pay the same amount to comparable male and female employees, unless there is a non-discriminatory reason that can be justified. The question of whether there is inequality in pay is not as straightforward as criticism of the BBC suggests.
The requirement to pay equal wages extends to employees doing different jobs but who are either employed on the same grade or doing work of equal value. So finding out whether two employees have work of equal value is a difficult matter. And even if jobs are of equal value, there may be a good reason why one employee is paid more than another.
If equal pay claims are pursued against the BBC, the company will have to address whether male employees do work comparable to that of its aggrieved female employees. If the jobs are comparable, the BBC will need to explain, and perhaps justify, any difference in pay.
Carrie Gracie’s resignation from the BBC sharpens the focus around this subject. Because a claimant who succeeds in an equal pay claim becomes entitled to the same wages as her/his comparator in future, and gets compensated for the difference in pay for up to six years before the date on which the claim is presented.
The gender pay gap measures the average difference between the overall pay of male employees as compared with female employees. All employers with 250 or more workers are required to publish gender pay gap details in March/April 2018.
It brings about another reason why the BBC’s situation worries bosses. It was the media company’s own decision to provide greater transparency around wages that resulted in its current criticism. So will employers be at similar risk of equal pay challenges after publishing gender pay gap information?
There are ways of minimising this risk
Ensure that you are clear about what is required of you when publishing gender pay gap results. Problem areas include the correct handling of salary sacrifice schemes; accounting for employees who do not have regular weekly working hours; and confusion regarding the handling of bonus payments as part of the gender pay gap figures.
Publish the correct information. As the Financial Times already noted, not all employers have made accurate results available. In addition, the Equalities and Human Rights Commission (EHRC) has indicated that it will focus its attention in the coming year on employers that fail to publish any results period.
Whether the EHRC has the legal power to take enforcement action is debatable, but becoming embroiled in this debate is not an attractive prospect for an organisation keen to avoid the gender pay spotlight.
Also, ensue that the reasons for a gender pay gap are understood through the careful collation and analysis of relevant material. Taking suitable steps to address any issues that ought to be addressed go a long way, as does producing a report that puts the figures into context and explains the results.
The spotlight on the BBC’s gender pay arrangements illustrates the potential for unwelcome publicity in what is rapidly becoming an emerging key theme in the employment arena.
Lorraine Heard is legal director at transatlantic law Womble Bond Dickinson