Public and Commercial Services Union

You are:

Home »
Resources »
Pay »
Equal pay auditing

Carrying out an equal pay audit

These materials and information are available from PCS PRIBS (Policy, Research, Information & Bargaining Support department) if you have any difficulty in obtaining them direct.

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

Detailed advice on equal pay auditing has been issued by the Cabinet Office:

Equal Pay: Guidance on Equal Pay for Government Departments and Agencies, January 2002 - available to people involved in Civil Service and NDPB pay reviews

Advice is also issues by the Equal Opportunities Commission:

Code of Practice on Equal Pay, and specific guidance documents available on the Equal Opportunities Commission web site.

PCS published an internal Policy Brief giving basic guidance on equal pay reviews in 2002 (pb002-02), and Policy Brief (pb036-03)

The National Pay Framework and National Pay Claims 2004 - Building the Campaign via Equal Pay cases explains the role of legal cases in the PCS pay strategy.

The TUC runs training courses for Equal Pay reps across the UK - information on contacts, venues and schedules can be found on the TUC web site.

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 Equal Opportunities Commission 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.

The Equal Opportunities Commission also points 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 Equal Opportunities Commission 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).