Equal Pay Audit

A comprehensive and systematic examination of an organization's remuneration structures, job evaluation systems, and pay practices to identify any direct or indirect discrimination in pay between male and female employees for work of equal value. This process involves detailed data analysis, review of HR policies (recruitment, promotion, performance appraisal), and often includes a job evaluation exercise. The audit aims to uncover the root causes of pay disparities and leads to the development of an action plan for remediation. The Panama Equal Pay Plan mandates regular equal pay audits for larger employers.

An 'Equal Pay Audit' under the Employment Rights Act 2025 is a comprehensive and systematic examination of an organisation's pay structures, policies, and practices to identify any pay disparities that may exist between employees performing equal work, work rated as equivalent, or work of equal value, where such disparities are linked to a protected characteristic. The Act makes these audits mandatory for employers found to have significant pay gaps or those subject to an enforcement notice. The audit process involves analysing pay data, evaluating job roles using objective criteria, reviewing pay progression and bonus schemes, and identifying the root causes of any identified disparities. The outcome of an audit must include a detailed action plan for rectifying any discriminatory pay practices, with specific timelines and measurable objectives. The Act empowers enforcement bodies to review these audits and action plans, ensuring their effectiveness in promoting pay equity.