Are you ready for the new equal pay law?

On 25 September 2020, the new Law on Equal Wages and Salaries for Men and Women has come into operation. Whether you are in a large organisation or in an SME in the private sector, you will have to adhere to the new law and compensate equal work with equal pay.

Gather your data.

If you are working with multiple HRIS or excel sheets, compile all the people data. The cleaner your data is, the smoother your analysis and the better the output will be.

Analyse equal pay for equal jobs.

If you are working with multiple HRIS or excel sheets, compile all the people data. The cleaner your data is, the smoother your analysis and the better the output will be.

Do you have a job architecture framework in place? If so, you can organise your gender pay analysis by job category, job and level. Smaller organisations often don’t have such a framework and you may depend on job titles for your analysis, which is generally less reliable.

As you see the first results, you may discover some discrepancies. To get a better understanding, create and test your hypotheses. Are these pay differences based on performance? Are they linked to length of service?

Review your benefit offerings.

In a second step, also examine your allowances and benefits. Do you offer a housing allowance to male employees but are asking female employees to proof their spouse isn’t working? Are you offering flight benefits only to widowed and divorced mothers but not to married ones, assuming the husband gets these flights from their employer, yet you pay it for male employees?

Create a plan for alignment.

Once you have identified the pay differences, identify a course for action. A one-time payment may bridge smaller pay inequities. What’s your approach to closing the pay gap? Will you make adjustments on a quarterly or annual basis? Will you split the adjustments in basic salary and allowances to limit the implications for bonus and end-of-service calculations?

Looking at your benefits, ensure your HR policies are written in a way that’s not directly or indirectly discriminating team members based on their gender or nationality.

Communicate with your team members.

Employees need to understand the pay equity analysis and how it affects them. Otherwise, a pay adjustment could be misinterpreted, especially as companies are still coming to terms with the financial implications of the pandemic.

Continue to monitor your approaches to equal pay.

Since not all adjustments can be made within one pay action, monitor and evaluate the situation. When hiring new team members or promoting exciting ones, are the principles of pay equity followed? If not, what is the reason? Is more guidance and training needed?

Stay legally compliant while maximising your payroll spend. Contact us and find out how we can support you and your team in creating an effective employee value proposition that acts as driver to attract and retain your talent.

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