Tackling your Equal Pay Audit
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P r o j e c t HR REWARD SPECILIALSTS Tackling your Equal Pay Audit Project HR working jointly with you P r o j e c t HR REWARD SPECIALISTS Page 1 Contents 1 Introduction 2 The business case for equal pay 3 Equal Opportunities Commission – equal pay review kit 4 Typical project stages 5 Data specification 6 Project plan 7 Contact details P r o j e c t HR REWARD SPECIALISTS Page 2 1. Introduction When the Equal Pay Act was introduced in the 1970’s the ‘pay gap’ between the pay of men and women was around 30%. After thirty years of the Equal Pay Act the pay gap has reduced to just 18%. Equal pay in local government is now ‘centre stage’. The Single Status Agreement required councils to review their pay structures to ensure they were fair, non-discriminatory and that they comply with equal pay principles. Since then there have been a number of other drivers encouraging councils to undertake an equal pay review. These include: • Pay Commission report; • National Pay Settlement 2004; • Local Government - equality standard; • EOC equal pay toolkit • High profile litigation (e.g. Stefan Cross) 2. The Business Case for Equal Pay The business case put forward by the EOC states that if you provide equal pay, you will: • Attract and retain the best people; • Reduce recruitment costs; • Improve morale, motivation and productivity; • ...
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Tackling your Equal Pay Audit Project HR working jointly with you
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P r o j e c t HR REWARD SPECIALISTS
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Contents
Introduction The business case for equal pay Equal Opportunities Commission equal pay reviewkit Typical project stages Data specification Project plan Contact details
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1. Introduction When the Equal Pay Act was introduced in the 1970’s the ‘pay gap’ between the pay of men and women was around 30%. After thirty years of the Equal Pay Act the pay gap has reduced to just 18%. Equal pay in local government is now ‘centre stage’. The Single Status Agreement required councils to review their pay structures to ensure they were fair, non-discriminatory and that they comply with equal pay principles. Since then there have been a number of other drivers encouraging councils to undertake an equal pay review. These include: · Pay Commission report; · National Pay Settlement 2004; · Local Government - equality standard; · EOC equal pay toolkit · High profile litigation (e.g. Stefan Cross) 2. The Business Case for Equal Pay The business case put forward by the EOC states that if you provide equal pay, you will: · Attract and retain the best people; · Reduce recruitment costs; · Improve morale, motivation and productivity; · Protect and strengthen your organisation’s public image and reputation; · Avoid expensive tribunal claims; · Demonstrate a genuine commitment to equal opportunities. 3. Equal Opportunities Commission Equal Pay Review Kit Whatever kind of equal pay review process is used, the essential features are the same irrespective of the size of the organisation: · Comparing the pay of men and women doing equal work; · Explaining any equal pay gaps; · Closing those pay gaps that cannot satisfactorily be explained on grounds other than sex.
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4. Typical Project Stages E 1 Planning 2 Equal Work 3 qGuaal Ps ay 4 RecoAmnamlyesnisd a&ti ons 5 APcltiaon n
The outline project plan follows the EOC’s 5 step model. This provides a robust and rigorous approach to equal pay review. The 5 steps around which a typical equal pay review is based are as follows: The 5 Steps Step 1: Planning Decide the scope of the review and identify information requirements. Step 2: Equal Work Identify where men and women are doing work of equa l value. Step 3: Equal Pay Gaps Collect pay data to identify pay gaps. Step 4: Analysis & Establish the cause of pay gaps and decide if these are free from Recommendations discrimination. Step 5: Action Plan Develop an equal pay action plan or review/monitor The objective, major activities and outcomes of each stage are outlined on the following pages.
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Step One Planning 1 Planning 2 Equal Work 3 Equal Pay 4 RecoAmnamlyesnisd a&t ions 5 Action Ga s Plan Objective To decide the scope of the review and to identify information requirements. Major Activities · Hold initial project meeting with client to verify aims and objectives and finalise scope of the review; · Discuss and agree project governance and project methodology; · Develop detailed project plan and project requirements; · Develop employee communication strategy; · Determine resources and support required; · Discuss and agree information requirements and data source(s); · Discuss and agree the extent of the pay review (e.g. to include ethnicity, disability or age? And what elements of pay are to be included); · Determine data collection methods; · Collect pay and people data ready for analysis.
Outcomes · Identified and agreed project scope; · Project plan covering steps 2-5; · Agreed project governance structure (e.g. Steering Group); · Identified client contacts, resources and employee representatives role; · Employee communications strategy; · Senior management commitment to project plan and scope; · Detailed project plan; · Data specification for the project and understanding of data issues; · Pay and people data.
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Step Two Equal Work A 1 Planning 2 Equal Work 3 EquGaal Psay 4 RecoAmnamlyesnisd a&ti ons 5 ction Plan
Objective To determine where men and women are doing equal work. Major Activities · Determine if job evaluation has been used to size jobs; · Review job evaluation scheme to determine o The design of the scheme; o The application of the scheme; and o Its coverage · Determine jobs doing like work o Review job titles; o Review job descriptions; · Group jobs rated as equivalent (if JE has been used); · Analyse jobs around grade boundaries; · Analyse current pay structure and pay practice.
Outcomes · An assessment of the current JE scheme and its operation; · An assessment of current pay structure and practice; · An analysis of where men and women are doing equal work; · An assessment of any areas where JE is not applied; · An assessment of risk at the interface, if two job evaluations schemes are used.
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Step three Equal Pay Gaps 1 Planning 2 Equal Work 3 EquGaal Ps ay 4 RecoAmnamlyesnisd a&t ions 5 APcltaionn Objective Analyse data and identify any equal pay gaps. Major Activities · Calculate and compare average earnings for basic pay; · Calculate and compare average earnings including additional payments, as agreed in initial data specification; · Review pay comparisons to identify any gender (or other) pay gaps; · Determine if pay gaps are significant and require further investigation; · Compare access to each pay element for men and women doing equal work; · Compare amount received for each pay element for men and women doing equal work. Outcomes · Analysis of men’s and women’s average basis pay; · Analysis of men’s and women’s average total earnings; · All gender pay gaps identified; · Significant pay gaps identified; · Recommendation on further investigation of pay gaps; · Analysis of additional pay elements and gender issues identified.
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Step Four Analysis and Recommendations 1 Planning 2 Equal Work 3 EquGaal Psay 4 Analysis & 5 APcltiaon n Recommendations Objective To establish the causes of any significant pay gaps and determine if the causes are gender related. Major Activities · Determine which elements of pay or pay practice are causing pay gaps; · Investigate why these pay elements or pay practice are causing pay gaps; · Determine if there is a genuine reason why pay gaps exist. Outcomes · An assessment of which aspects of the pay system are causing pay gaps between men’s and women’s pay; · An assessment of whether there are genuine reasons for pay gaps, that have nothing to do with the gender of the job holder; · An assessment of pay policies and practice; · Potential steps that could be taken to reduce/eliminate gender pay differences.
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Step Five Action Plan 1 Planning 2 Equal Work 3 EqGuaal Psay 4 RecoAmnamlyesnisd a&ti ons 5 Action Plan Objective To develop an equal pay action plan. Major Activities · Develop an equal pay action to close any pay gaps, including: o A plan to provide equal pay within a reasonable timeframe; o Changes to policies and practices that contribute to equal pay issues; o An assessment of the cost of closing the gaps; · Develop a change management programme that highlights critical success factors and potential barriers to change; Develop a communications strategy; · · Develop ongoing monitoring and review processes to ensure equal pay risk is minimised in the future; · Undertake a risk assessment where a phased approach is adopted; · Consider employee relations impact if a phased implementation approach is adopted; · Implement an Equal Pay Policy. Outcomes · Detailed implementation plan; · Recommended review and monitoring system; · Communications strategy; · Change management programme; Risk assessment; · · Cost impact forecast; · Assessment of employee relations issues.
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5. Data Specification The collection and analysis of data is one of the main building blocks of an equal pay review. The following is a list of the basic data requirements. The actual data specification will be agreed during stage one. The data needs to be collected electronically for analysis in Excel. · Name · Employee No (e.g. Payroll No) · National Insurance No · Job title · Job ID (e.g. Post number) · Department/section · Team · Location · Gender · Date of birth · Joining date · Post start date · Basic salary · Total earnings · Grade · SCP · Hours/FTE · Base hours · Weeks per year · Contractual basis · Job evaluation score · Fixed/variable allowances (if included in review) · Ethnicity (if included in review) · Disability (if included in review)
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6. Project Plan Some organisations will be able to proceed with an EPR faster than others. A detailed project plan will be developed with the client during Step one. A typical outline project plan may look like the following:
Step 1 Step 2 Step 3 Step 4 Step 5
Month one
Month two Month three
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Month four
Month five
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