Equality and Human Rights Commission

In this step you will:

• Compile information on the pay of each employee and enter this on your audit spreadsheet or table
• Compare the pay of employees doing equal work

A. Compiling information on the basic and total pay of each employee

You need to collect together information on the basic pay and total earnings of your employees and enter it on the sample spreadsheet. This information should be in your payroll records.

First, enter each person’s basic hourly pay in column K. If all your employees work the same number of hours you can use weekly/monthly/annual basic pay, if you prefer. But many businesses employ people working different hours and for pay to be compared on a like-for-like basis, hourly pay will be needed. To work out the basic hourly pay of each employee take his or her basic pay for a standard week and divide it by the standard hours that person works. There are columns on the spreadsheet to record each employee’s weekly basic pay and standard hours worked, as well as the hourly pay.

If additional pay is earned through overtime, shift pay, bonuses, commission or any other form of additional payment then you should enter each person’s average total earnings. Because these additional payments can vary from week to week, you should calculate total hourly earnings over a period of time to get a representative average figure. To work out average total hourly earnings:

• Take an employee's total earnings over an appropriate time period (for example, the last payroll period, or year to date) (column L of the spreadsheet)
• Divide this by the number of weeks in the time period (column M)
• And divide again by the standard hours worked by the employee in a week (column N)

There are columns in the spreadsheet for each of these.

Finally, note down any other work related benefits each employee receives, for example the amount of holiday entitlement, sick pay, pension contributions or a company car. There are columns in the spreadsheet for these benefits. You can adapt or omit these columns, depending on the benefits your business provides.

You have now assembled all the information you need to begin comparing pay. You may already have found the process of completing your spreadsheet or table thought provoking as you considered the different jobs and what they are paid.

B. Compare the pay of employees doing equal work

Like work

First you need to compare the pay of employees - men and women, for example - doing like work. In step two you numbered each set of jobs in your business that are like work, that is the same, or pretty much the same.

Check which of these jobs are done by both men and women. Do you have male and female delivery drivers? Or production workers? For each job done by both men and women check:

Question	response	response
Are the basic hourly earnings the same for men and women doing this job?	yes	no
Are the total hourly earnings the same for men and women doing this job?	yes	no
Do men and women doing this job get the same type of benefits?	yes	no
Is the amount of the benefit the same for men and women in this job?	yes	no

If the answer to any of these questions is 'No', you need to establish what is causing the difference and whether the differences are justifiable. This is covered in step four.

As numbers of men and women in each of these jobs are likely to be small, you will probably be able to see clearly whether there are differences in pay related to the sex of the job holder. If you have more than a handful of men or women in any job, then calculate the average pay of each sex and compare their average pay. If there is a difference of more than a few pence an hour you need to establish what is causing the difference and whether the difference is justifiable. If not, you may be vulnerable to an equal pay claim (see step four).

If you employ staff from different ethnic groups and your records permit, repeat this step to compare the pay of white staff with ethnic minority staff, where they do 'like work'.

If you employ staff with disabilities, check whether they are in one of your 'like work' groups and compare their pay with non-disabled colleagues in the same group following the steps outlined above.

When comparing pay you may notice variations in pay between two men doing equal work, or between two women doing equal work. That raises questions about the general fairness of your pay, rather than questions of equal pay from a legal perspective, which is the focus of this toolkit.

Work of equal value

Now you need to compare the pay of employees doing work of equal value. In step two you assessed jobs in your business using the equal value estimator and you gave each separate job a points score (column C on your spreadsheet or table) and grouped them into points bands.

Take each points band and check whether it contains both men and women. If it does not, move to the next band. For each band where there are both men and women check:

Question	response	response
Are the basic hourly earnings the same for men and women in this band?	yes	no
Are the total hourly earnings the same for men and women in this band?	yes	no
Do men and women in this band get the same type of benefits?	yes	no
Is the amount of the benefit the same for men and women in this band?	yes	no

If the answer to any of these questions is 'No', you need to establish what is causing the difference and whether any differences are justifiable. That is the subject of step four.

As numbers of men and women in each of these bands are likely to be small, you will probably be able to see clearly whether there are differences in pay related to the sex of the job holders. If you have more than a handful of men or women in any band, then calculate the average pay of each sex in that band and compare their average pay. If there is a difference of more than a few pence an hour, you need to establish what is causing the difference and whether the difference is justifiable. If the difference cannot be justified you may be vulnerable to an equal pay claim (see step four)

If you have employees from different ethnic groups and you have reliable records of ethnic origin, repeat this step to compare the pay of white staff with ethnic minority staff where their jobs place them in the same band of points.

If you have employees with disabilities, allocate each of these employees’ jobs to a points band and compare their pay with non-disabled colleagues in the same points band following the steps outlined above.

If you have found no differences between the pay of men and women doing equal work (or other groups you have checked), your audit is positive and you can move to step five. Keep the records of this audit and repeat it again every couple of years.

Summary

At the end of step three you should have:

• Collected the pay information you require for each employee - basic pay, total earnings and other benefits - and entered the details on your spreadsheet or table
• Compared the pay of men and women doing like work/the same jobs
• Compared the pay of men and women doing work of equal value, using points bands
• Repeated the process for ethnicity and disability, if you have the information to do so

Now you are ready to move to step four - assessing the reasons for pay differences and whether you can show that the differences are unrelated to, for example, the sex of jobholders. Or, if your pay audit showed no pay differences, move straight to step five, but keep the records and repeat the audit every couple of years.