Assessing the reasons for differences in pay and deciding on measures

Differences in pay have to have acceptable reasons

The Equality Act requires that the employer must account for reasons behind pay differences, if a review of groups based on job grade, duties or other grounds in the pay survey reveals clear differences between pay for men and women. If the workplace has established a remuneration system in which wages consist of pay components, the central components are inspected in order to clarify the reasons for the differences noted.

The Equality Act also requires that "if no acceptable reason is found for differences in pay between men and women, the employer shall take appropriate corrective action".

Therefore the pay survey does not only consist of describing salaries. An essential part of the pay survey is comparing salaries, discovering the reasons for differences in pay and assessing these reasons. Pay differences must have a reason that is acceptable according to the Equality Act. If this is not the case, then the differences in pay are in violation of the Equality Act. If, on the other hand, there is an acceptable reason for the differences in pay, then the difference is justified insofar as it is caused by that reason. Equal pay requires that each salary component in itself is non-discriminatory.

In addition to differences in difficulty, acceptable justifications for pay differences include factors such as personal performance, longer work experience, inconvenient working hours, the versatility of the employee or reasons related to the working conditions. The differences in pay can, for a specific reason and for a limited time, also be caused by organisational mergers, the introduction of a new remuneration system, changes in duties and market factors.

Measures to achieve equal pay

The measures concerning pay included in the equality plan depend on the cause of unacceptable pay differences. Measures should be as concrete as possible. It is also beneficial to include a schedule in the plan for when the pay-related measures will be carried out.
The issues that are revealed during the pay survey may also give cause to measures that are not directly related to pay. If for example women are underrepresented in better-paid task groups, the measures could be related to promoting women's career progression. It should also be made sure, however, that the remuneration system is not discriminatory as it is.

Pay is mentioned separately in the Equality Act as a topic which should be included in the measures of equality plans. If an equality plan does not include any concrete measures relating to pay, then the Ombudsman for Equality recommends that the plan includes a justification for why this is the case.