Top Tips for Avoiding Equal Pay Claims for Businesses
As a business owner, the last thing you want is to be accused of mistreating your employees. Not only will it give the business a bad name, but it will also upset the people you value highly, and who you need to keep your company afloat.
Paying your staff fairly is very important, and also written into UK employment law. If you neglect to give your employees equal pay, then they could file a claim against you at an employment tribunal.
This can have serious consequences for the future of your business, but don’t panic. With our help, you’ll be able to avoid equal pay claims with ease, keeping your company a happy and fair place to work in.
Are you a business struggling to understand how to avoid or handle equal pay claims?
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What are Equal Pay Claims?
Equal pay claims can be filed by employees who think they aren’t being paid equally to colleagues of the opposite sex in similar roles, doing similar work.
Equal pay concerns the value of the work undertaken by your employees. So, if two people work in similarly valued roles, even if the roles are different in nature, you may be required to pay them equally.
For example, a female member of staff might file an equal pay claim if she finds out that a male member of staff of similar experience and job value is receiving more pay, or for example a monthly bonus on top of his regular paycheque when she is not.
This would be classed as unfair treatment on the basis of someone’s gender, which is against the law.
The Equality Act 2010 classes gender as one of the nine ‘protected characteristics’, which you must not discriminate against colleagues, bosses, or employees for.Get in touch
How to Avoid Equal Pay Claims
The main way you can avoid equal pay claims is to ensure that all employees are paid fairly.
It’s a good idea to make sure your business draws up a strict yet open policy concerning equal pay, which falls in line with the Equality Act 2010.
This way, if an employee feels like they aren’t being paid fairly on the basis of their gender, you can guide them through company policy and work together to identify why they feel underpaid.
We would also advise that you undertake an equal pay audit to make sure that your pay systems are fair and transparent.
In this audit you will complete the following three steps:
- Compare the pay of men and women doing equal work
- Identify any pay gaps
- Eliminate pay gaps which you can’t explain on any other grounds than gender
Keeping Your Employees Happy
If a member of staff approaches you or another member of staff to discuss their pay, don’t make them feel guilty about doing so.
Instead, offer to talk to them about it and refer to your company’s policy when you do.
If you have an explanation for a pay discrepancy, you have nothing to worry about.
It’s actually illegal for businesses to prevent employees from having discussions to establish if there’s a difference in their pay under the Equality Act 2010.
Remember, avoiding equal pay claims does not mean avoiding the concerns of your employees. If they aren’t happy, your business will suffer.
It’s important for everyone at your company to feel valued and respected, and neglecting to pay someone the same as their colleague because of their gender will do neither of those things.
How to Handle Equal Pay Claims
When employees file equal pay claims they are allowed to serve a statutory questionnaire and ask you for information and documents regarding benchmarking or pay systems.
If a member of your staff decides to serve a statutory questionnaire, you have eight weeks to respond. If you don’t, you risk your company being viewed unfavourably at the tribunal which follows.
The first step an employee should take if they think they aren’t receiving equal pay should be to come to you informally, or complain through your company’s formal grievance procedure.
If, for whatever reason, they feel like the issue can’t be resolved by using either of these avenues they can then make a claim at the employment tribunal.
Making a Decision
You need to decide whether or not you accept the factual basis of your employee’s claim as soon as possible.
If you don’t, you have the right to argue that the job your employee is using to compare theirs to is not alike, equal or equivalent.
If the tribunal upholds this, your employee’s claim will have failed.
If you accept that the roles are comparable, you can still defend the inequality in pay.
To do this, you’ll have to show that the difference in pay is due to a ‘genuine material factor’ and not your employee’s gender.
What counts as a material factor will depend on the context of the whole case, but common examples are seniority, geographical or regional factors, and historical reasons.
Whatever the reason for a pay discrepancy, and whether you accept their claim or not, for the best interests of your company and its reputation it’s smart to treat the employee and their claim with respect.
We understand that you probably feel frustrated and worried, but it’s important that you work cooperatively as much as you can.
Our Employment Solicitors Can Help Your Business
At AWH we understand that equal pay claims can damage your reputation.
They can put customers off coming to you, and even put current or potential staff off working in your company.
But you don’t have to worry. We’re here to support you.
With years of experience, our employment law solicitors have the expertise to protect your business and reputation.
Get in touch using our contact form or call 0844 414 0667.
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