News Article - 09 June 2009
Category: Business

Government ministers have rejected calls to vote on whether equal pay audits should become compulsory as soon as the Equality Bill comes into force in August 2010. In the initial draft, equal pay audits will only become compulsory in 2013 if inadequate progress has been made voluntarily. The bill reached the report stage in parliament on December 2

The proposal to vote on compulsory pay audits was not expected to receive widespread support, but it has ensured the issue will be properly discussed once the Equality Bill reaches the House of Lords. Liberal Democrat equality spokesperson Lynne Featherstone MP, who proposed the vote, believes the issue of equal pay has increased in prominence, and will continue to do so unless workspace equality is pursued aggressively. The pay gap currently stands at 12.2%.

Whilst it is unsure when pay audits will become compulsory, the government is clearly attempting to close the pay gap. Once the Equality Bill comes into effect, employers will no longer be able to use employment contracts to prevent staff from talking about their wages. In addition, tribunals will be given wider powers to make recommendations to businesses on how to improve workplace equality.

Businesses should start considering how the Equality Bill - and the possibility of compulsory pay audits - will affect their current practices. Recent research shows that fewer than 1 in 5 (18%) of private businesses measure their gender pay gaps. As pay equality becomes more topical, businesses will be required to provide usable data to the government regarding gender equality within the workplace.

Companies who are unable to measure their pay gaps will also be unable to close them. Reputations may suffer if a commitment to improving workplace equality cannot be shown. Access payroll & HR software can break down pay distribution on a departmental and individual basis, providing usable metrics that can be used to develop businesses practices that promote workplace equality.

Businesses that start analysing pay distribution early will develop the infrastructure necessary to improve workplace equality well before the Equality Bill comes into effect. As the issue becomes more prominent, companies who have not prepared sufficiently may struggle to meet government requirements.

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