Public and Commercial Services Union

 PCS is happy to assist with any specific queries on equal pay auditing.

Detailed advice on equal pay auditing has been issued by the Equality Human Rights Commission (EHRC) attached to the Code of Practice on Equal Pay.

General principles

The pay system should:

• Apply to all staff
• Be clear and easy to understand
• Be transparent - people should know why they and their colleagues are rewarded as they are
• Avoid discretionary payments if possible
• Apply clear guidelines to those areas that are discretionary, especially starting/promotion salaries, performance related pay, bonuses, recruitment and retention allowances and market-based pay.

The job evaluation system should:

• Be appropriate to the jobs it will cover
• Clearly justify any exclusions from the scheme
• Incorporate equal opportunities guidelines
• Be implemented by a panel representative of the jobs covered and trained in job evaluation and avoiding bias
• Be based on job descriptions written to an agreed format and assessed to a common standard
• Involve job holders in writing job descriptions
• Ensure that any generic or benchmark jobs are free from bias
• Provide exact factor definitions and levels
• Ensure that the factors cover all important job demands

The EHRC advises that whatever the size of the organisation and whatever kind of equal pay review process is used, it should include:

• Comparing the pay of men and women doing equal work, i.e. one or more of the following: like work; work rated as equivalent; work of equal value
• Identifying any equal pay gaps
• Eliminating those gaps that cannot be satisfactorily explained on grounds other than sex.

If the exercise does not include these elements, it cannot claim to be an equal pay review.

They go on to point out that a review is not simply a data collection exercise, but must also entail a commitment to put right any sex based pay inequalities and have the support of managers with the authority to deliver the necessary changes.

The EHRC model has five steps:

• Deciding the scope of the review and identifying the data required
• Determining where men and women are doing equal work
• Collecting pay data to identify equal pay gaps
• Establishing the causes of any significant pay gaps and assessing reasons for these
• Developing an EP action plan and/or reviewing and monitoring.

Data collection and analysis

Listed below are some standard types of data that should be collected and analysed when auditing pay (it is based on gender, but the same analyses can be used for disability and ethnicity).

These basic data should be supplemented by other data relevant to your particular organisation, especially if specific problems have been identified.

It is sometimes helpful to do a more detailed analysis of particular grades, or to collect data on length of service, earnings of part-time workers etc.

A consistent approach should be adopted, for example using hourly rates or full-time equivalent annual salaries and specifying the type of analysis - e.g. median or mean averages, so that comparisons are meaningful.

• Distribution of men and women across pay bands/grades.
• Distribution of men and women within pay bands/grades.
• Distribution of part-timers across and within pay bands/grades.
• Gender profile of part-time staff.
• Mean/median salary by gender overall.
• Mean/median salary by gender in each pay band/grade.
• Mean/median salary of men and women on entry, by grade or pay band.
• Mean/median salary of men and women on promotion, by grade or pay band.
• Mean/median amount of PRP awarded by gender and grade or pay band.
• Mean/median amount of incremental increases by gender and grade.
• Mean/median amount of overtime, allowances, benefits received by gender and grade 

Elements to consider

Each of the following elements of the reward package should be assessed on the amount, criteria and level of access available to men and women in the organisation, the proportion of men and women who receive this element and the average amounts received.

Proposals need to be checked on how they are or will be implemented and the impact they have or are likely to have. In terms of equal pay law, it is how pay practices actually affect pay that matters - not the intention behind them.

Any gaps of 5% or more, or patterns of 3% or more, should be examined more closely to establish whether they are genuinely caused by factors unrelated to gender or whether remedial action needs to be put in place.

Areas covered by the Equal Pay Act

• Total earnings,
• Basic pay,
• Non-discretionary bonuses,
• Overtime rates and allowances,
• Performance related benefits,
• Bonuses,
• Severance/redundancy pay,
• Access to pension schemes,
• Benefits under pension schemes,
• Hours of work, including annual leave,
• Company cars, sick pay, fringe benefits (e.g. travel allowances, fees to professional bodies - a fuller list is contained in the Cabinet Office guidance).

Areas covered by Sex Discrimination Act

• Recruitment,
• Training,
• Promotion,
• Dismissal,
• Benefits (e.g. payment of professional fees)

Areas contained in Cabinet Office guidance

• Years in grade,
• Years in civil service,
• Career breaks,
• Regional differences,
• Specialists