1 – Get shipshape for gender pay reporting
The whole culture around equal pay for men and women has shifted perceptibly in the last few years. It is becoming much more common for employees to discuss and compare pay, bonuses and other terms. Gender pay differences pose a significant litigation risk for businesses and the financial exposure to multiple claims can be high.
The Government has pledged to ‘eliminate the gender pay gap in a generation’. As a first step, compulsory gender pay reporting for employers with more than 250 staff will soon become law. The report has to be published on the company’s website and any pay gaps are likely to lead to further scrutiny, difficult questions from Trade Unions and possibly equal pay litigation. Organisations with fewer than 250 staff cannot be complacent as the indications are that such compulsory reporting will be extended to all employers over time.
Now is the time for all employers to consider conducting a voluntary audit now to identify any gender pay gaps and address them where applicable. The audit should cover basic pay, bonuses, allowances, overtime and other financial terms. Remember that jobs don’t have to be identical or even similar to be open to pay comparison. Employees can compare themselves on the basis of like work or work of equal value (e.g. a dinner lady might compare herself with a road sweeper or gardener and a shop cashier might compare herself with a warehouse worker). A word of warning – the audit may contain information that could expose the organisation to equal pay claims. You must involve your lawyers in any proposed audit to avoid disclosure. This should ensure that the audit qualifies for ‘legal professional privilege’ and, therefore, that it cannot be the subject of a disclosure order by a Court.
2 – Health check your holiday pay arrangements
Now that the dust is beginning to settle on the ‘Bear Scotland’ and ‘British Gas v Lock’ cases about overtime, commission and holiday pay, employers can take stock. The direction of travel of the current case law suggests that we are likely to reach a position where all overtime and the majority of commission payments will need to be included in holiday pay calculations. Now is the time to review holiday pay arrangements to ensure that payments are legally compliant and that any exposure to back payment claims has been minimised or eliminated. Remember that although the above cases dealt specifically with overtime and commission payments, other regular payments intrinsic to the contract of employment such as shift allowances or other bonuses might also need be included when calculating holiday pay.
3 – Check working patterns are giving best value
Above inflation increases to the National Minimum Wage, the introduction of the National Living Wage and the apprenticeship levy (for some employers) together with increased holiday pay costs mean that many employers are facing higher payroll costs. Existing shift patterns and payments, overtime arrangements or bonus schemes may need to be re-structured in order to keep costs at a reasonable level or for staffing levels to remain viable.
Making changes to existing and long-standing working arrangements requires skilful navigation to avoid successful claims but it can, in the majority of cases, be done within the law. The key is to have a clear business case and to follow the rules on employee consultation and notice. This area can be difficult and we would strongly recommend seeking legal advice before making any restructure proposals.
4 – Audit data/IT security
As employees’ access to IT, database and intranet systems (together with social and professional media platforms) increases, the onus is firmly on employers to ensure that their business is protected from system abuse, leakage of confidential data and reputational damage. Examples of disgruntled or careless employees leaking data or misusing social media feature regularly in the media and the financial and reputational cost to their employer can be devastating. The key is to think through the potential disaster scenarios and be one step ahead. IT policies, procedures and safeguarding processes should be reviewed and updated (if necessary) on an annual basis. Consider the access that each group of staff has to confidential data (and the damage they could do if things went wrong) and then consider whether any access limitations or additional policy or practical safeguards need to be introduced. For example, senior executives may need access to confidential pay information but should not be able to download the company’s entire payroll database without seeking internal approval.
5 – Stay up to date
Knowledge is power and the employer that is confident of its ground will spend less time and money engaged in employment niggles and disputes than one regularly found on the back foot. We know that most employers are bombarded each month with email employment law updates and newsletters and it is not always easy to separate the wheat from the chaff. Let us help with the ‘too much information’ problem! Walker Morris produces high quality and relevant employment law newsletters and updates which will help to keep you abreast of the ‘need to know’ developments.
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If you would like to discuss any of the points in this update please contact Andrew Rayment.