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Pay inequality in 2017

Most of us would have read or heard about the BBC’s recently published “rich list” which is a list of BBC employees who have a salary of £150,000 or more. Of the 96 top earning tv and radio stars who made this year’s rich list, notably only one third were women.

Equal pay was introduced in 1975 under the Equal Pay Act. The legislation now covering equal pay is contained in the Equality Act 2010 which implements the principle that men and women should receive equal pay for equal work.

Under the Equality Act 2010, employees are entitled to contractual terms that are as favourable as those of a comparator in the same employment of the other gender if they are employed on equal work. Equal work is defined as “like work”, “work rated as equivalent” or “work of equal value”.

An employer can only justify a difference in pay if they can demonstrate a material factor defence that is not directly or indirectly discriminatory. For example, seniority and length of service, market forces and skills shortages have previously been considered to be material factors justifying a difference in pay.

It would seem that there could be potential for some of the stars on the BBC rich list to make claims for equal pay. In cases where a disparity in pay is found and there is no justification for the difference, employers can be ordered to compensate the underpaid employee for the time that they were underpaid for up to 6 years.

Gender Pay Gap reporting

The Gender Pay Gap reporting requirements came into force this year and private employers with 250 employees or more will have to publish the first gender pay gap information by 04 April 2018.

Although companies are not required to explain or remedy any pay gap, if the report shows that there are significant differences in pay between the genders it may cause unrest in the workforce and perhaps lead to the risk of employees bringing equal pay claims. In addition, it is likely that if the information published discloses significant and unexplained differences in pay it could result in negative publicity which might lead to problems in recruitment or retention of staff.

Comment

Employers should carefully consider how employees could be categorised under the reporting regulations, look for suspected gaps and how those can be lawfully explained. If necessary, it would be advisable for employers to try to deal with any disparities before the publication of the information.

If you would like to speak to us about equal pay or sex discrimination, please feel free to email us  or contact us on 0191 282 2880 for a no obligation chat.

 

 

 

 

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