Equal pay and employee benefits

Recent reports have shown that there has been an increase in the number of equal pay claims1 against employers, particularly since companies had to release their gender pay gap reports. Whilst there are certainly discrepancies in pay between different employees, it is vital that all employees understand their full employee benefits package and the compensation they receive in addition to their salary.

Equal pay

The Equal Pay Act 1970 prevents differing treatment of men and women in terms of their pay. The Act said that an individual has a right to claim equal pay when they are employed in:

  • Like work: Which means work that is the same or broadly similar, regardless of whether the job title is the same.
  • Work rated as equivalent: Which means work that has been rated as equivalent under a job evaluation scheme.
  • Work of equal value: Which means work that requires the same levels of effort, skill, knowledge and responsibility.2

But here the term pay includes things like holidays, pensions, company perks and some bonuses3. Some employees may not be aware that equal “pay” refers to their whole benefits package rather than the figure of their salary. So it’s important that you ensure your employees understand all of their benefits and the value to them personally.

Your employee benefits package

You have most likely worked hard to design and secure an employee benefits package that works well for your employees. But your investment may be wasted if your employees don’t understand, and therefore don’t value those benefits.

Some employees may even be considering leaving you for a job with a higher salary, so they need to understand that the benefits you provide may be worth more than an increase in basic pay.

The importance of benefits education

Some employees may have financial worries that impact their wellbeing as well as their productivity at work, and they may think that a pay rise can improve their situation. But financial fitness is about more than just a pay cheque.

Helping employees to understand their benefits and how they are relevant to their lives outside of work will help them make the most of them. Read more about how you can educate your employees.

Making the most of their benefits means employees can alleviate some of their financial problems and they will understand the value of their benefits and the value you place on them as their employer.

Understanding their full benefits package can help you to make sure your employees know they are receiving equal pay where salaries may differ. As a result they are likely to be more engaged, more productive and loyal, helping you retain key talent.


1. employee benefits: Equal pay claims gather pace
2. closethegap.org.uk
3. Just The facts101, Understanding the Law, Equal Pay Act



This information is provided for the purposes of general interest and is not intended to apply to specific circumstances. Reasonable steps have been taken to check accuracy at the time of writing but we make no representation as to future accuracy. This information does not constitute legal or regulatory advice. We are not qualified to provide, and will not provide, legal or regulatory advice. We recommend that you obtain your own such specific legal or regulatory advice on matters such as equal pay from relevant professional advisers.