Pay men and women equally for equal work

The Equality Act 2010 writes a sex equality clause into every employment contract. If a woman and a man do equal work and the man has better pay or contract terms, her contract is treated as modified to match his, unless you can show a genuine reason that has nothing to do with sex. The rule applies to all contractual terms, such as bonuses, holiday and pension, not only salary.

When work counts as equal

Jobs that look nothing alike can be of equal value. A claim from a dinner lady against a groundsman, for example, turns on what each job demands of the worker in effort, skill and decision-making, not on job titles.

Who an employee can compare themselves with

The comparator must be of the opposite sex and be employed by you or an associated employer, and either:

• work at the same establishment as the claimant
• work at another establishment where common terms apply to both of them
• have terms set by the same single body that is able to ensure equal treatment between them
• have terms governed by the same collective agreement as the claimant

Employers are associated if one is a company controlled by the other, or both are controlled by a third person.

Defend a pay difference

You carry the burden of showing that a pay difference is because of a material factor. The factor must not involve treating the claimant less favourably because of her sex, and it must be a real difference between her case and the comparator's. If the claimant shows that the factor puts women doing equal work at a particular disadvantage compared with men, you must also show it is a proportionate means of achieving a legitimate aim. Reducing inequality between men's and women's terms is always a legitimate aim.

Write down the reason for any pay difference when you set it, such as the market pressure you faced or the extra qualification the role uses. A reason created after a claim arrives is hard to defend.

Let employees talk about pay

A term in a contract that stops an employee disclosing their pay, or asking a colleague about theirs, is unenforceable when the purpose is to find out whether pay differs because of a protected characteristic. Disciplining an employee for such a conversation is victimisation. Pay conversations for other purposes are not protected.

Check your pay for risks

No law requires an equal pay audit unless a tribunal orders one. A voluntary audit is still the most direct way to find a problem before a claim does. To run one:

If a tribunal finds you broke equal pay law, it must usually order you to carry out an audit. The order gives you at least three months to send it to the tribunal. The audit must show the pay differences between men and women, the reasons for them and your plan to stop breaches continuing.

You must then publish it within 28 days, on your website for at least three years if you have one, and tell the employees covered where to find it. Failing to comply without a reasonable excuse can cost up to £5,000 per penalty. The tribunal does not order an audit where, for example, you have completed a suitable one in the last three years, or the business is new or has fewer than 10 employees.

Time limits and remedies

A claim in the standard case must be brought within six months of the last day of the employment. Longer periods run from other dates where the employee was kept unaware of the facts, was incapacitated or worked in a stable working relationship that has ended. A current employee can claim at any time, but arrears are still limited.

A tribunal can make a declaration and order arrears of pay or damages. The Act sets no limit on the amount, and the contract is corrected for the future too.