In 2013, a US tech company called Buffer took the dramatic step of publishing every employee’s salary online.
Rather than causing widespread outrage, in the month that followed, the firm received more than double its usual number of job applications. In one move it had proved the popularity of gender pay parity.
In the UK, earnings are for many a tightly guarded secret but for others it is seen as a barrier to equality.
That’s why the Equal Pay Bill was introduced to the House of Lords in January focusing on the ability for female workers to find out what their male counterparts are earning.
Baroness Prosser’s Private Members Bill (PMB) also calls for the extension of gender pay gap reporting rules, introduced in April 2017 for employers with over 250 people, to those employing more than 100.
In some countries, this is now normal. Germany introduced an Act in 2017 enabling employees in certain organisations to request information in relation to equal pay. Iceland adopted an equal pay certification process requiring those employing more than 25 to certify they are paying men and women equally.
The recent Fawcett Society report: Why women Need a Right to Know: Shining a Light on Pay Discrimination highlighted that 60% of female employees don’t know what comparable men earn.
But there is evidence that greater transparency could be beneficial. According to a report from the Royal Academy of Engineering, having a transparent pay and progression policy with clear salary ranges and grades is one of the most effective steps a firm can take to reduce the gender pay gap. Transparency could play a significant role in overcoming the current pay gap of around 11% between female engineers and their male counterparts.
For many UK employers and employees, such a radical change as publishing salaries is likely to be a long way off. A key concern is that it could lead to a wave of equal pay challenges.
Here are three ways to determine whether there are hotspots where equal pay challenges could arise.
Job evaluation scheme
This involves a systematic procedure of analysing and comparing different job roles to help achieve a non-discriminatory pay scheme. While often time-consuming and costly, carrying out an evaluation of this type will provide an absolute defence to an equal pay claim, where two jobs have been rated differently under the scheme.
Equal pay audit
A lighter touch option which involves identifying where men and women are doing equal work and comparing their pay. It is important to explore and document the reasons for any differences identified as this can help with any defence to future challenges. It also gives employers the opportunity to remedy any differences, although this can pose its own separate challenges.
Equal pay review
A less systematic version of the equal pay audit, where potential gender pay gaps can be identified and analysed.
While the odds are against Baroness Prosser’s PMB becoming law, its message is clear: more needs to be done to tackle gender pay disparities in workplaces. Full salary disclosure remains an extreme option and is likely to create as many problems as it will solve, in the short term at least.
There are, however, steps that employers can take to make their pay processes more objective and transparent. In addition to an equal pay audit, they can give pay decisions more objectivity by publishing pay bandings, impact assess pay increases, publish promotion criteria and move away from asking for past salary information at interviews.
In my experience, pay inequality is rarely intentional but disparities and discrimination can however emerge over time. That’s why it’s important that processes are put in place to understand and rebalance subjective decisions which can distort pay between the sexes.
Catriona Aldridge, is a senior associate at law firm CMS