Low Pay, Equal Pay and the Living Wage

The Government has announced proposals that employers who do not pay workers the National Minimum Wage and the National Living Wage will face more stringent penalties.  The proposed sanctions include doubling penalties for non-payment and even disqualifying employers from being a Company Director for up to 15 years.

The Living Wage is set to increase to £7.20 per hour from April 2016, albeit this will only apply to workers aged over 25.  The National Minimum Wage is currently £6.50 per hour, but this rises to £6.70 in October 2015.

The Government has also announced plans to significantly increase its enforcement budget for non-payment and to set up a new team within HMRC to pursue criminal prosecutions.

Separately, the issue of low pay and gender has hit the news frequently over the course of the last month. There clearly is a gender pay gap. The issue is the extent to which the gender pay gap arises from men and women being paid different rates of pay, or from women working in lower skilled/paid roles but which offer part time and/or flexible hours.

As many local authority employers have found to their cost, the fact that they pay men and women the same rate of pay to do the same jobs does not preclude an equal pay claim. The provisions of the Equality Act enable a woman to claim  equal pay to a man. A claim does not need to be founded on the fact that the woman is doing the same role as a man, but can also be founded on a woman claiming that she is doing work rated as equivalent, or work of ‘equal value’. The latter type of claim has enabled domestic workers predominantly female and part time to achieve pay equivalence with male workers undertaking roles such as care takers and refuse collection in the public sector. Increasingly, we are seeing claims being supported by trade unions in the private sector and third sector.

If a woman can establish that her work is of equal value to a man, that she is paid less and there is a gender disparity in the roles being compared, then she establishes a case that the employer needs to be able to rebut by establishing that is  a ‘genuine material factor’ that explains the differential in pay, for example a skills shortage in one role requiring a higher level of pay.

Employers with more than 250 employees will soon be required to publish pay data broken down by gender. IF the statistical evidence reveals significant gender disparities this in itself may provoke further action by disgruntled female employees.

HardingEvans Solicitors offers assistance to employers in establishing an Equal Pay audit.  This helps employers identify issues and consider whether there is a material factor defence and the steps that may need to be taken to address any gender inequality in pay. Critically, we can arrange for a privileged expert high level review of your working practices to identify the level of risk.

For further information please contact Daniel Wilde, Head of our Employment Department, on 01633 244233 or email wilded@hevans.com