Equal Pay Requirements in Employment

The Equality Act 2010 requires employers to provide equal pay for equal work regardless of sex.

The Legal Framework

Sex Equality Clause

Every employment contract automatically includes a sex equality clause, which means:

• If a woman's work is equal to a man's, her contract is modified to give her equal terms
• This applies to all contractual terms, not just pay
• Works both ways (men can also claim)

What Is Equal Work?

Type	Definition
Like work	Same or broadly similar jobs
Work rated as equivalent	Different jobs rated equal under job evaluation
Work of equal value	Different jobs requiring equivalent effort, skill, and decision-making

Choosing a Comparator

To bring an equal pay claim, you need a comparator of the opposite sex who:

• Works for the same or associated employer
• Works at the same establishment (or a different establishment with common terms)
• Is doing equal work

Real Comparator Required

You cannot use:

• A hypothetical comparator
• A predecessor (someone who did the job before)
• Someone at a completely different employer

What Must Be Equal?

All contractual terms, including:

• Basic pay
• Overtime rates
• Shift premiums
• Bonuses
• Holiday entitlement
• Sick pay
• Pension contributions
• Benefits (car allowance, private health)

Employer's Defence

Employers can justify pay differences with a material factor defence if:

The Factor Is Genuine

Real reason for the difference, such as:

• Different qualifications or experience
• Performance-related pay
• Location differences (e.g., London weighting)
• Market forces (skills in short supply)
• Red-circled pay (protecting historical pay)

Not Tainted by Discrimination

The factor itself must not be directly or indirectly discriminatory.

Proportionate

If the factor has a disparate impact on one sex, it must be:

• A legitimate aim
• Necessary to achieve that aim
• Proportionate

Pay Transparency

Right to Discuss Pay

Employees have the right to:

• Ask colleagues about their pay
• Discuss pay openly
• Disclose pay information to others

Pay secrecy clauses that prevent this are unenforceable.

Gender Pay Gap Reporting

Employers with 250+ employees must publish:

• Mean and median gender pay gaps
• Bonus pay gaps
• Proportion of each gender receiving bonus
• Proportion of each gender in each pay quartile

Making a Claim

Time Limits

• Claims can be made while employed or up to 6 months after employment ends
• For ongoing underpayment, each pay period is a separate breach
• Claims can go back up to 6 years for arrears

ACAS Early Conciliation

Before tribunal, you must:

1. Contact ACAS
2. Attempt early conciliation
3. Obtain early conciliation certificate

Equal Pay Questionnaire

You can submit questions to your employer about:

• Pay of your comparator
• Reasons for any difference
• Job evaluation results

Employer's failure to respond can be used as evidence.

Remedies

Back Pay

Successful claimants can recover:

• Up to 6 years' arrears of pay
• Interest on arrears
• Pension contributions difference

Contract Modification

Your contract is modified to provide equal terms going forward.

No Compensation Cap

Unlike discrimination claims, there's no limit on equal pay arrears.

Preventing Equal Pay Issues

For Employers

1. Conduct pay audits - review pay by gender regularly
2. Clear pay structures - transparent grades and criteria
3. Job evaluation - objective assessment of role value
4. Document decisions - record reasons for pay differences
5. Review regularly - catch issues before claims arise

Pay Audit Checklist

• Compare pay by gender within each grade
• Identify any gaps over 5%
• Investigate and document reasons
• Take action to close unjustified gaps
• Repeat annually

Common Scenarios

Part-Time Workers

Part-time workers (often women) comparing to full-time workers (often men) can bring claims if:

• They do equal work
• Part-time status doesn't justify the difference

Bonus Schemes

Women excluded from bonus schemes open to male colleagues doing equal work can claim the bonus entitlement.

Restructuring

When restructuring creates equal pay issues, employers should:

• Review impact on gender pay
• Consider transition arrangements
• Avoid perpetuating historical inequalities