REWARD
The future of pay equality and how technology can help
Danny Done, Managing Director of Portfolio Payroll, provides some tips on how to handle change within the workplace, with a focus on communication
U nless you’ve been living under a rock for the past six months, you’ll know the current Labour government is planning to make sweeping changes across the world of employment rights. Many of these changes will be brought in under the Employment Rights Bill, currently working its way through Parliament. However, as part of the government’s ‘ Plan to Make Work Pay ’, further proposals may be introduced on areas such as equal pay rights. What are the proposed changes? Under current legislation set out in the Equality Act 2010, businesses must provide equal pay to both men and women if their duties and the work they do is the same or broadly similar. Since 2017, enforced by the Equality and Human Rights Commission, businesses with 250 or more employees have been required to publish an annual gender pay gap report. This report is based on a ‘snapshot’ taken on 5 April (or 31 March for most public authority employers) each year, covering the difference between male and female pay of employees in their organisation. On top of this, it’s recommended these businesses then produce an ‘equality action plan’ to tackle any shortfalls. The Employment Rights Bill includes proposals to enhance the above, making the production of an ‘equality action plan’ a requirement, rather than just a recommendation. It’s expected that these action plans will need to differ from any other policies, with a clear focus on tackling any inequalities when it comes to the gender pay gap.
“The government proposes to introduce an Equality (Race and Disability) Bill, which will expand and enhance the remit covered by current equal pay legislation to cover more employees”
However, the government doesn’t want to stop there. Alongside this Bill, the government proposes to introduce an Equality (Race and Disability) Bill, which will expand and enhance the remit covered by current equal pay legislation to cover more employees. It’s expected that this Bill will include proposals on extending equal pay rights and the requirement to produce a pay gap report to cover ethnicity and disability. In practice, this means employers will have to ensure workers carrying out duties and work which is the same or broadly similar must not be paid differently on the basis of sex, ethnicity or disability.
enforcement unit that, with involvement from trade unions, will oversee pay equality in the workplace. What this will look like in practice remains to be seen. However, the government has previously committed that the Equality (Race and Disability) Bill, which will include this, will be introduced during this Parliament. How can technology help? As with any pay-related topic, employers should firstly ensure their current practices are legally compliant and inline with current legislation. For employers to effectively and easily review their current data, they should ensure they have robust systems in place for tracking. Where an annual report may be required, or the need to produce evidence arises, employers must be able to access this information quickly and be confident that it’s both accurate and reliable. While some businesses may prefer to keep it ‘old-school’, many businesses may find the benefits of using technology such as human resources or payroll software outweigh any costs associated with it. Having the confidence their pay practices are compliant and up to date, alongside knowing any reporting or enforcement requirements are met, will help employers mitigate the risk of the consequences of costly legal action in the future. n
How will these changes be enforced?
To ensure employers comply with these proposed rules, the government intends to restrict the ability for businesses to outsource their services in the aim of avoiding paying equal pay, putting the onus solely on the employer. Currently, equal pay claims are brought by individuals to an Employment Tribunal, and although this can sometimes be done on behalf of a group, for example, in the current high-profile Asda equal pay claim, there’s no overarching body to oversee pay equality. The government proposes to combat this and ensure compliance by implementing a new regulatory and
| Professional in Payroll, Pensions and Reward | April 2025 | Issue 109 38
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