Female managers are earning an average £12,000 less than their male counterparts, new research shows. Analysis of the salaries of the UK’s 3.3 million managers by the Chartered Management Institute (CMI) and XpertHR found the gender pay gap now stands at 26.8 per cent. According to Kate Palmer, Peninsula’s head of advisory and equality expert, with the gender pay gap rightly making headlines more often, it is highly likely that employees may suspect that they are being paid less because of their gender. This is unlawful as the Equality Act 2010 prohibits employers from paying men and women different amounts because of their sex.
“Employees who can prove they are being paid less for doing like-work, work rated as equivalent or work of an equal value as the employee of the opposite gender could bring an equal pay claim. Where the different salary is due to an internal policy, for example a policy that men will be promoted over women, the employee could also bring a sex discrimination claim,” she says.
Employers can defend against equal pay claims where they can prove they have an objective, material reason for the difference which is not gender and this is a proportionate means of achieving a legitimate aim, according to Palmer. This could be the type of qualifications the employee has, the location the equivalent employee works in or market forces. “The financial risk of facing these claims is huge; compensation for an equal pay claim will look to equalise salaries whereas compensation for sex discrimination is unlimited.”
Employees may, however, simply feel that they are receiving less pay for doing the same work. For Palmer, having discussions with the employee about why they are on their particular salary, what they can do to increase to the next level and setting realistic targets will help stop complaints turning in to bigger issues. “These discussions often take place at annual reviews or appraisal meetings. If the employee raises a concern outside of these meetings, it’s important to hold a discussion then and not wait until the next scheduled appraisal,” she adds.
“The requirement for larger companies to produce gender pay gap reports could see an increase in salary complaints. Although this is not a legal requirement, it is important for employers to make use of the voluntary option to provide additional contextual information. This information can be used to explain any gender pay gap in the business, identify where results have been affected by, for example, a second job or a particular bonus, and set out the steps that the business will take in the future to tackle this.” Providing this narrative allows employees, and the public, to understand why any pay gap is present and identify that the business is taking active steps to reduce this, says Palmer. “In the short term, this will reduce complaints and help with retention of employees.”