What can business do to close the gap?
1. Understand the issues
It is important to understand what the gender pay gap is all about. Get useful information, resources and tools under the Learn section of the WGEA website http://www.wgea.gov.au/learn.
2. Conduct a gender pay gap analysis
The most effective way you can identify and address a gender pay gap is to carry out a regular gender pay gap analysis. In larger organisations this may be done by comparing female and male annualised average full-time equivalent remuneration within grade/band/level/classification and in the organisation overall.
In smaller organisations, it may be more appropriate to compare individual female and male remuneration for comparable roles, as well as average female and male remuneration in the organisation overall.
- The WGEA pay equity analysis tool enables assessment of gender gaps in remuneration
- Gender pay gaps are generally calculated as women’s proportion of men’s earnings.
- The completeness of the analysis depends on the adequacy of the data – for example, whether all components such as bonuses, allowances, etc. are included.
- The assessment of whether gender-related differences in remuneration constitute unjustified and/or unlawful gender pay gaps depends critically on the soundness of the evaluation of work.
- The Fair Work Act defines work value in terms of skills, responsibility and working conditions, and requires equal remuneration for men and women workers for work of equal or comparable value.
- A meaningful pay equity analysis requires grouping jobs according to comparable value.
- In practice, having more than 10-15 groupings can make the analysis unwieldy.
Each organisation will have different data available for a pay equity analysis, but as a minimum there must be:
2 Actual and ordinary hours
Items enabling calculation of full-time equivalent employee numbers – for example, actual hours employees work and full-time hours for the positions.
3 Pay Components
Items enabling calculation of total remuneration – for example, base pay, allowances, higher duties, bonuses and so on.
The items may be available for a period (for example, a week or a fortnight), in which case the number of periods per year will be needed to calculate full time equivalent (FTE) total annual remuneration
4 Job title / classification
The usefulness of the analysis will depend on:
- how well the job title/classification corresponds to a sound analysis of the required elements of work value (skill, responsibility and working conditions) an
- the extent to which the evaluation of work is free of gender bias
- Beyond this, many other data items are possible and will add to the quality of the analysis.
- The WGEA payroll analysis tool has been designed to allow a large range of possible additional data items but if they are not available, the tool will still work.
- The more employee-related variables available, the easier it is to assess whether a gender-related pay difference reflects a legitimate reason (for example, job size).
- The more remuneration variables, the easier it is to pinpoint where the gender differences arise, and to identify likely reasons.
Most businesses will notice pay gaps between men and women at one or more levels or in the organisation as a whole or both.
Rarely, an organisation can explain and justify all gender pay gaps. In this case remedial action is not needed but action to prevent any gender pay gaps occurring is recommended.
If an organisation cannot explain a gender pay gap or can explain but not justify a gender pay gap action is needed to address this issue.
3. Review staff practices
Many small businesses do follow recruitment and selection processes when hiring new staff.
They also have processes they follow when negotiating with staff over promotions, pay increases, change in working arrangements etc.
These processes should be reviewed to make sure they do not hinder the appointment or career progression of female employees.
For example, businesses should ensure that fair recruitment and promotion practices are used, part-time work at senior levels is facilitated and gender bias in job evaluation and remuneration frameworks is removed.
Pay equity analysis tool
The Payroll Analysis Tool can calculate the gender pay gap for your business as a whole, as well as breakdown the pay gap by factors such as employment status, grade and occupation.
Grouping comparable jobs according to the extent of the pay gap enables a more in-depth analysis of any gender pay gap and will help a business to understand where there are inexplicable or unjustifiable pay gaps between women and men.
Payroll analysis tool manual
UK Equal pay audit toolkit for small businesses
It aims to help small businesses to understand their obligations under the provisions of the UK Equality Act that relate to equal pay and provides step-by-step advice to enable them to check whether they provide equal pay in practice.
The toolkit is intended for UK businesses with up to 50 employees.
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