A court case in the U.K. could eventually have significant ramifications for employers in the U.S.
The court case involves an equal pay claim brought forth by female employees of retail firm Asda, one of Britain’s leading retailers serving millions of customers through its U.K. network of stores and online services, including supercenters, superstores, supermarkets, and filling stations.
The claim, first filed in 2014, is based on complaints by female retail workers at Asda supermarkets. The women, who performed in-store jobs, have asserted Asda is practicing gender discrimination because the women supermarket employees are paid less than distribution center employees, most of whom are men. The women employees assert that they should receive the same rate of pay as the male distribution center employees. Asda has argued different pay scales are justified because the in-store retail employees work under different terms and conditions and in different locations than the distribution center workers.
Under U.K. law, women can claim equal pay for equal work when compared to a man doing work that is:
- Like work – this is where the works involves similar tasks which require similar skills, and any differences in the work are not of practical importance
- Work rated as equivalent – this is where the work has been rated under a fair job evaluation scheme as being of equal value in terms of how demanding it is
- Work of equal value – this is work which is not similar and has not been rated as equivalent, but is of equal value in terms of demands such as effort, skill and decision-making.
Under the terms of the U.K. Equality Act 2010, employees can select equal pay comparators across locations if “common terms” apply to their employment. The U.K. courts have supported the position of the Asda women employees, stating that they can compare themselves to their employee counterparts in the distribution centers even if their work duties are different and they work in different locations. This is because Asda applied the same terms and conditions of employment between the claimants (the supermarket employees) and the comparators (the distribution employees). According to the website Accountancy Daily, no appeal from this decision is available to Asda and therefore the case will proceed on its merits.
This U.K. equal pay case raises some potential concerns for employers in the United States. Perhaps the biggest concern is the recognition that employers ultimately have the responsibility to identify and correct unexplained pay disparities that exist within the organization, no matter how large or diverse. Employers are responsible for ensuring the pay structure and integrity within their organization is justified, and fair and within the parameters of the law.
It’s not too soon for U.S. employers to review their compensation structure and perform a pay equity audit to determine if they have pay disparities that need to be addressed to ensure compliance with the law and to mitigate any risk of expensive litigation or their brand reputation.