Equal pay audits
Equal pay audits

The following Employment guidance note provides comprehensive and up to date legal information covering:

  • Equal pay audits
  • Equality Act 2010 — equality of pay
  • Background to tribunal ordered equal pay audits
  • When the tribunal must order an equal pay audit
  • When the tribunal must not order an equal pay audit
  • Exemptions to the requirement to order an equal pay audit
  • Content of the tribunal's order and the equal pay audit
  • Determining compliance with order for equal pay audit
  • Penalties for failure to comply
  • Publication of tribunal ordered equal pay audit
  • more

An equal pay audit is a tool used by employers to identify potential discrimination in the workplace arising from unequal pay for equal work.

Some employers choose to carry out equal pay audits on a voluntary basis. The process of carrying out an equal pay audit can enable an employer to:

  1. show its commitment to achieving and promoting equal pay

  2. compare the pay of protected groups who are doing equal work

  3. investigate the cause of any gaps by reference to a protected characteristic (most commonly gender)

  4. identify steps to close any gaps identified that cannot be legally justified

  5. use the findings and action points identified as a risk assessment for pay structures, and

  6. reduce potential equal pay breaches going forward

Most employers do, unintentionally, have some gaps in pay which are highlighted by an audit. While many of these might be capable of objective justification, employers may nevertheless be reluctant for the results of an audit to be disclosed either internally to the workforce (which may lead to complaints or claims based on the information disclosed) or made public to the world at large (eg to the press, clients and competitors).

For employment tribunal claims presented on or after 1 October 2014, where a tribunal makes a finding of an equal pay breach, it must order the respondent to carry out a