July 19, 2010
Employers who regularly instruct their staff not to discuss wages with outside parties will have to amend their employment contracts over the next 12 months, the government has confirmed.
Under October’s Equality Act, ‘gagging clauses’ which contractually prevent employees from talking about their pay and bonuses will be abolished.
Such a cloak of secrecy has dominated the banking and financial sectors, in particular, for decades. But the government believes that, in order for equality to become wholly universal in the workplace, employees should be able to discuss their wages and decipher whether they are being underpaid in relation to their colleagues.
“From October 2010 the Equality Act will make pay ‘gagging’ clauses unenforceable so that companies will no longer be able to stop employees comparing their salaries with colleagues. Bringing an end to the culture of pay secrecy will make it easier for women to find out if they are being paid less than men,” announced Home Secretary and Minister for Women Theresa May.
October’s Equality Act could also force employers to research and standardise pay between male and female colleagues. By conducting ‘pay audits’, businesses may have to make information about gender pay gaps publicly available, leaving themselves liable for legal action and public discourse.
With the government keen to eradicate gender pay inequalities, current employees who feel they have been unfairly discriminated against, or underpaid in more general terms, should approach employment law solicitors and see what course of action is available.
Similarly, employers worried about what widespread changes the Equality Act will enforce from October 1st, must seek advice and keep the law’s extended reach at bay in the future.
