Employers have been advised to protect themselves against potential equal pay claims as the number of class actions taken by employees continues to grow.
HR consultants Watson Wyatt advise employers to ask themselves 10 questions to evaluate how vulnerable they are to equal pay claims. They are:
1. Is equal pay a consideration in the human resources policy in your organisation?
2. Does your human resources team understand the implications of current and future equal pay legislation?
3. Is equality of pay embedded in the recruitment, retention and engagement policies of your organisation, including monitoring starting salaries by gender?
4. Does your executive leadership understand and sponsor the concept and implications of equal pay?
5. Do your managers understand the concept and implications of equal pay?
6. Does your organisation have a job evaluation scheme?
7. Does your organisation believe that the job evaluation scheme can manage the issue of equal pay in your organisation?
8. Does your organisation provide guidelines to help managers in performance management discussions and in the allocation of pay increase and bonus awards?
9. If challenged, would your organisation be able to justify gaps in base pay and annual bonus between a male employee and a female employee who have the same role and responsibilities?
10. Does your organisation have a process to deal with an equal pay claim?
If an employer answers “no” to any of these 10 questions it might trigger an internal policy review, say the consultants.
“Equal pay claims, even if groundless, take time and money to deal with, and can sully an organisation’s reputation,” said Ian Milton, a senior reward consultant at Watson Wyatt. “But this is not just about avoiding legal action. How is employee engagement affected if it is known that gender pay gaps are somehow acceptable? Too often organisations can cite a policy on managing equal pay, only for practice to demonstrate that their managers neither understand nor appreciate the policy.”