EQUAL PAY
Select committee calls for mandatory pay audits
A parliamentary committee of MPs has called for the government to introduce regulations to require large private sector employers to undertake equal pay audits.
The Business, Innovations and Skills Committee in its report on women in the workplace, published 20 June 2013, states:
“We welcome the government’s proposal to give tribunals the power to require an employer to undertake an equal pay audit when discrimination has been proved. However, there is existing legislation addressing inequality in pay that has not yet been implemented. The government should introduce regulations under Section 78 of the Equality Act 2010, to require large private sector employers to undertake and publish equal pay audits. That data could then be used to highlight where pay gaps exist."
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Dawn Nicholson, partner at PwC, said:
“This is a huge step in the right direction. It is hard to see how any significant progress in closing the gender wage gap can be made without companies being required to examine their gender pay gaps in the workplace.
“While UK companies are making progress in closing the gender wage gap, this progress is not quick enough. The current voluntary approach set out by the government is not sufficient, has not had the desired effect and needs to go further. Greater reporting transparency will force many companies to reassess whether their pay practices are fair and will almost certainly cause a shift in gender pay patterns. Such reporting can also yield valuable information about the workforce and identify 'hotspots' and any areas of concern."
Vanessa Morgan, partner, PwC Legal, said:
“Whether equal pay audits become mandatory or not, companies should still be looking to carry them out to identify and understand any bias in how they pay and reward their staff. Equal pay audits will give companies a clear view of their position and allow them to understand why and where the bias is happening. The results should form a key part of companies’ pay and reward processes and be used to challenge and inform future pay decisions. It is often easier to make pay and promotion decisions for someone 'in your own image'. Managers need to be given the tools to look beyond this and deal with the challenges of a diverse and changing workforce.
“Given the upcoming changes to employment tribunal's powers to order equal pay audits, companies which voluntarily conduct equal pay audits now will effectively be insuring themselves against any future equal pay orders.”
Want to know more?
Title: Women in the Workplace, First Report of Session 2013–14 Volume I, House of Commons Business, Innovation and Skills Committee, 20 June 2013.
Availability: You can download BIS committee reports in PDF format from www.parliament.uk/business/committees/committees-a-z/commons-select/business-innovation-and-skills/publications/.
The Business, Innovation and Skills Committee is appointed by the House of Commons to examine the administration, expenditure and policy of the Department for Business, Innovation and Skills (BIS) and its associated public bodies, including the Office of Fair Trading (OFT).