Assessing the reasons for differences in pay and deciding on measures

Differences in pay have to have acceptable reasons

The Equality Act requires that the employer must account for reasons behind pay differences, if a review of groups based on job grade, duties or other grounds in the pay survey reveals clear differences between pay for men and women. If the workplace has established a remuneration system in which wages consist of pay components, the central components are inspected in order to clarify the reasons for the differences noted..

The Equality Act also requires that if no acceptable reason is found for differences in pay between men and women, the employer shall take appropriate corrective action.

Therefore the pay survey does not only consist of describing existing salary data. An essential part of the pay survey is comparing salaries, discovering the reasons for differences in pay and assessing these reasons. It has to be assessed whether there is a reason for the differences in pay which is acceptable according to the Equality Act. If this is not the case, then the differences in pay are in violation of the Equality Act. If, on the other hand, there is an acceptable reason for the differences in pay, then the difference is justified insofar as it is caused by that reason. Equal pay requires that each salary component in itself is non-discriminatory.

According to the justification for the Equality Act, the differences in pay may, apart from ones caused by different levels of difficulty, also be based on e.g. personal performance, longer work experience, special responsibility, inconvenient working hours, the versatility of the employee or reasons related to the working conditions. The differences in pay can, for a specific reason and for a limited time, also be caused by organisational mergers, the introduction of a new remuneration system, changes in duties and market factors.

Measures to achieve equal pay

The assessment of the reasons for differences in pay act as a basis for the measures regarding pay that are included in the equality plan.

The measures that are included in the equality plan should be as concrete as possible. It is also beneficial to include a schedule in the plan for when the pay-related measures will be carried out, even if such a schedule is not required by the Equality Act.

The issues that are revealed during the pay survey may also give cause to measures that are not directly related to pay. If it for example is revealed that women are underrepresented in a group with higher pay, then attention should be paid to career progression. It should also be made sure, however, that women's pay is not discriminatory as it is.

Pay is mentioned separately in the Equality Act as a topic which should be included in the measures of the equality plans. If the equality plan does not include any concrete measures relating to pay, then the Ombudsman for Equality recommends that the plan includes a justification for why this is the case.