On this page you can look beyond gender at pay gaps across the equalities areas.
Pay gaps – some definitions
A pay gap, on whatever grounds, does not necessarily signify unequal pay for equal work. Pay gaps may, or may not, indicate labour market or workplace discrimination, but their existence suggests that there are factors that need addressing if the chances for equality in work, including pay equality, are to be achieved.
Pay gaps are most commonly measured using median or mean gross hourly earnings excluding overtime.
Of the definitions set out below, the definition of the gender pay gap is well-attested. For the other equalities areas the definitions are the working definitions used by researchers; they compare the average full-time pay for men and women from each potentially disadvantaged group to the average pay of men from the majority group.
- The gender pay gap refers to the difference between men’s earnings and women’s earnings as a percentage of men’s earnings.
- The disability pay gap refers to the difference between disabled men’s or women’s earnings as a percentage of non-disabled men’s or women’s earnings. Disability is defined as either causing limitations to daily activity or limitations to employment.
- The ethnic pay gap refers to the difference between the earnings of men or women from various ethnic minority groups as a percentage of White British men’s or women’s earnings.
- The age pay gap refers to the difference between the earnings of men or women from various age groups as a percentage of the earnings of men aged between 40 and 44.
The legal framework
The principle that women and men are entitled to equal pay for doing equal work is set out in sections 64 to 80 of the Equality Act 2010 (the ‘equality of terms’ provisions). With one exception (see below) these provisions apply only to gender, but this does not mean that pay inequalities on other grounds cannot be challenged.
The right to equal pay for equal work is a contractual right enforceable through the Employment Tribunal, and while there is no parallel course of action available to an employee experiencing pay discrimination on grounds of age, ethnicity, or any other of the protected characteristics, this means only that such pay inequalities are not challenged as a matter of contract, but as a matter of discrimination. However, while there is an extensive body of case law on equal pay between men and women, there is little or no case law to draw on in respect of pay gaps in the other equalities areas.
Section 77 of the Equality Act 2010 provides that an employer cannot prevent their employees from discussing or providing information about whether or to what extent there is unlawful pay discrimination on any of the protected grounds. Section 77 is the only section of the ‘equality of terms’ provisions which applies to all of the equality strands. All the other provisions relate specifically to gender (equal pay as between men and women).
The Public Sector Equality Duty
While the Public Sector Equality Duty has the potential to encourage attention to be paid to pay gaps more generally, mention of specific protected grounds is confined to Scotland and Wales.
In Scotland public bodies are required: to gather employment information related to disability; to publish employment information in a ‘mainstreaming report’ every two years; to publish equality outcomes relating to disability and report progress.
From 2017, Scottish authorities with more than 150 employees will be required to publish a further equal pay statement containing information on occupational segregation and their equal pay policy which, for the first time, will include disability and race. The proposals for activity aim to ensure that good quality information can be provided in a meaningful way to help assessment of progress on occupational segregation and equal pay policy for disabled and/or ethnic minority staff.
The Scottish Government will work with Close the Gap, EHRC and Authorities and others to:
- Develop more specific and detailed guidance and tools to support better pay gap and occupational segregation reporting
- Support national training to build skills specific to pay gap calculation and occupational segregation reporting
These supports would be designed with users to help ensure, where possible, consistent reporting on the gender pay-gap and occupational segregation and prepare the ground for the new reporting requirements on disability and race. In addition, the Scottish Government will work with public bodies to encourage networking, share practice and help create innovative solutions.
In Wales, public bodies are required to have “due regard to the need to have objectives that address the causes of any pay difference between employees who are from a protected group, and those who are not; if it appears reasonably likely that the reason for the difference is related to the fact that those employees share a protected characteristic, e.g. they are from a minority ethnic group”.
The Companies Act 2006
In so far as disability is concerned, a mechanism for reporting on any pay gap does potentially exist, in that the Companies Act 2006 requires companies employing more than 250 people to disclose in their directors’ reports information about their policy in respect of the employment, training and career development and promotion of disabled people. This could be read as including pay.
Good equal pay practice
The methods used to identify and remedy unlawful gender pay discrimination, as described in the statutory Code of Practice on Equal Pay, and from authoritative bodies, such as the EHRC and Acas, can also be used to identify and remedy unlawful pay discrimination on grounds other than gender.
Experience has shown that once gender pay reporting and auditing methods are established by an employer, very little extra work is involved in extending them to cover other protected grounds, provide always that the levels of disclosure are sufficiently high as to make any analysis meaningful.
The Pay Equality Research Consortium
A group of like-minded universities – Exeter, Bath, Bristol and Cardiff – have come together to help businesses understand how pay gaps occur and how they can be dealt with. Working together under the umbrella of the GW4 alliance of the four South West and Wales universities, the Pay Equality Research Consortium (PERC) aims to work with employers to help them understand the conditions that create pay gaps in their business. Exeter’s Professor Carol Woodhams is leading the initiative.
Although the main dividing point in the pay gap is gender, the gap can be exacerbated by other factors such as age and ethnicity. In order to understand the pay gap more thoroughly, PERC will look widely at all pay gaps and work place policies to highlight those which cause a pay gap. Researchers are currently interviewing HR directors to establish what data they hold and formulating questions that employers would want answering through data analysis.
It can be difficult to gather pay information from employers due to data protection laws, but with the information available, PERC will design and create an online pay gap tool which will give employers a confidential and bespoke report on what factors are likely to be causing pay inequality in their organisation.
Consultations are already under way to establish the design of the platform and the features that businesses want to see, and it is hoped that the tool will be up and running within two years, thereby enabling businesses to more easily identify what they can do to ensure that inadvertent advantages and disadvantages in their polices are confronted and rectified.
PERC’s research will not only prove invaluable in ensuring equality in individual workplaces, but it will also allow employers and researchers to better understand the causes and remedies for pay gaps. It will then be possible to engage in knowledgeable dialogue with policy makers, allowing for real change to be achieved and the pay gap closed for good.
As with case law, while there is a vast body of research into equal pay and the gender pay gap, there is very little research into the pay gaps for other protected characteristics. Research has tended to focus not on pay, but on employment rates or entry to the labour market. Research is also hindered by the small population size of some groups as compared to the much larger male/female populations from which statistics can be drawn and trends inferred. At workplace level, this difficulty may be exacerbated by low levels of disclosure of ethnicity, disability status, religion or belief or sexual orientation.
Despite the paucity of information, it is clear that pay gaps are an issue for several equalities groups and that we need to understand more about what is driving the pay gaps and penalties for different groups. For more detail see the reports listed below, but some implications are self-evident e.g. that pay gaps and pay penalties for disadvantaged groups are unlikely to diminish if large proportions of those groups occupy part-time posts, or move into full-time, but low paid work.
Pay equity after the Equality Act 2010: does sexual orientation still matter? Bryson, A, University College London, UK; IZA, Germany; NIESR, UK, 2016
Pay gaps across equalities areas, Longhi & Platt, ISER, University of Essex, EHRC 2008
Equality group inequalities in education, employment and earnings, Li, Devine & Heath, Universities of Manchester & Oxford, EHRC 2008
Pay gaps across the equalities strands, Metcalf, NIESR, EHRC 2009
Older people inside and outside the labour market, Smeaton & Vegris, Policy Studies Institute, EHRC 2009
Understanding the ethnic pay gap in Britain, Brynin & Gueveli, ISER, University of Essex, 2014
Intersectional Sensibilities in Analysing Inequality Regimes in Public Sector Organizations, Healey, Bradley & Forson, Queen Mary University of London, 2011
Multiple disadvantage and wage growth: the effect of merit pay on pay gaps Woodhams, Lupton, Perkins & Cowling, University of Exeter, 2015
Forthcoming from the Equality and Human Rights Commission
Research into the scale, causes of and solutions to gender, ethnicity and disability pay gaps, Essex University Institute for Social and Economic Research (ISER) & Institute for Employment Studies (IES) – Malcolm Brynin, Simonetta Longhi (ISER), Duncan Brown and Andrea Broughton (IES)
The aims of the project are:
- To review the evidence base and identify the causes of pay gaps for each group
- To establish the size of pay gaps for women, ethnic minorities and disabled people
- To analyse the relative impact of different variables on gender, ethnicity and disability pay gaps
- To review and discuss with stakeholders the effectiveness of certain interventions by government, employers and other organisations to reduce pay gaps for each group
The project, which commenced in September 2015, will use a combination of literature review, statistical analysis and primary qualitative research with stakeholders and employers.
EHRC research contact: firstname.lastname@example.org
Last updated 10th December 2016