Pay parity and overall fairness irrespective of any protected characteristics and differing jurisdictions
Google has agreed to pay $28 million to settle a lawsuit alleging racial discrimination. Whilst there may be jurisdictional differences owing to the American Laws, this case highlights the fundamental point of pay parity and overall fairness irrespective of any protected characteristics and differing jurisdictions. Emma-Louise Hewitt, Partner and Head of our Employment team explains.
Inequality and discrimination
Inequality and discrimination sit at the heart of this matter in the same way as the equal pay cases that were reported last year in the UK. The premise of these cases was that women are paid a lower salary than men doing the same, similar, equivalent, or, of equal value, work. The Equal Pay Act 1970 was the first piece of UK legislation that enshrined the right to pay equality between women and men. However, despite its introduction, this wasn’t enough as unequal pay still existed, and so mandatory Gender Pay Gap Reporting was introduced in 2017 with the aim of narrowing and eventually eliminating the pay difference between men and women.
Diversity, equity and inclusion
Currently in the UK, ethnicity pay reporting is voluntary, which many people may not know, but those who have participated have done so as part of their broader focus on Diversity, Equity and Inclusion (DE&I). However, the proposed Equality (Race and Disability) Bill includes a commitment to require all large employers to publish data by ethnicity and disability, making reporting mandatory. This highlights the fundamental flaws in the pay system when it comes to determining what to pay employees. Many employees believe that what they are paid determines their overall value to their employer. So, if their pay is not at the same level as another employee who is undertaking the same, similar, equivalent, or, of equal value, work, then the employee will not feel valued, and if that other employee or group of employees happen to have a protected characteristic, then this can amount to discrimination, leading to costly employment tribunal claims.
The government is currently consulting on how best to report this information before it becomes the law, but employers should now aim to start voluntarily compiling and filing their ethnicity and disability pay reports as part of their approach to improve inclusion and tackle inequality within the workplace.
How employers and HR leaders can be proactive
Employers and HR leaders need to ensure pay equity in the workplace and in so doing, should review and analyse its pay scales/structures and consider the differences based on gender, ethnicity and disability as a minimum starting point. Being proactive in calculating any gaps means the employer will have more time to take action to try and close the gap before it becomes mandatory to publish the details publicly.
How employers collect the data will require careful consideration owing to there currently being no obligation on employees to provide information about their race or disability to their employer. So, employers will need their employees’ buy-in, so clear communication and meaningful engagement is the best way forward.”
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