| HR & EMPLOYMENT LAW
Jackie Le Poidevin, Editor-in-Chief, HR Adviser |
Why Ending Salary History Questions is a Win-Win for Businesses and Job Seekers
Equal Pay Day – the day when women effectively start working for free for the rest of the year because, on average, they earn less than men – fell on 18 November this year. The Fawcett Society, a charity which campaigns for women’s rights at work, based this date on the UK’s latest gender pay gap figures, which show a slight rise in the pay differential between men and women. Here, we look at what this year’s gender pay gap statistics tell us and what single step the Fawcett Society is urging employers to take to reduce pay inequality and improve job seekers’ perception of them.
This year’s figures show that the mean hourly gender pay gap for full-time workers stood at 11.9%, compared to 10.6% in 2020 and 13.1% in 2019. This means that women, in effect, have to work 2 extra days this year for free, with Equal Pay Day in 2020 having fallen on 20 November. The widening of the pay gap is most marked for younger women, who as a group tend to work more in sectors such as hospitality that were badly hit by the pandemic.
This year’s figures are likely to be less accurate due to a change in the way employers with furloughed workers were asked to report their gender pay gap and a drop in the number of employers submitting data. As the Fawcett Society notes, we’ll have to wait and see if the gap narrows again post-pandemic.
How to Tackle the Gender Pay Gap
Although this is complex problem, the Fawcett Society’s campaign is currently focused on one measure which it claims can have a significant impact on ending pay disparity.
It is calling on employers to end the practice of asking job applicants about their salary history, which it says prevents women escaping previous pay discrimination when they move jobs. In the US, 21 states or city governments have banned salary history questions to some degree, with research tending to find that these bans have narrowed the gender pay gap. They also benefit ethnic minorities and anyone who entered the workforce during a recession and whose initial low wages can otherwise haunt them throughout their career.
The Case for Not Asking About Salary History
The Fawcett Society surveyed more than 2,200 people, half of whom had been asked about their salary history. Apart from the impact on reducing the gender pay gap, the survey suggests there are other good reasons for not asking such questions:
- 57% of women and 54% of men agreed being asked salary history questions made them feel less positive about their potential employer.
- 63% of women and 58% of men agreed they would think more highly of an employer who avoided asking salary history questions.
- Just 24% of respondents agreed that salary history should be used. Instead, criteria such as the skills required to do the job (80% of respondents) and the value of the work to the organisation (77%) were agreed to be the most valid ways to determine pay.
- Four in ten workers admitted they have lied in response to salary history questions.
In other words, asking job applicants about their salary history is an unreliable way of determining how much to pay someone, can tarnish your reputation and can put job applicants off you as a potential employer.
Separate polling by the Equality and Human Rights Commission has shown that nearly two-thirds of women take the gender pay gap into account when considering applying to a new job.
What Approach Should You Use Instead?
Offering job applicants the lowest rate you think you can get away with based on their current salary could ultimately prove costly. Your ideal candidate may walk away or accept the job but leave after a short period, leaving you to restart the recruitment process.
The best-practice approach is to include a specific salary or salary band when you advertise jobs and avoid using terms such as ‘competitive’ or ‘negotiable’. To help you decide what’s an appropriate pay rate:
- Monitor job adverts to see what your competitors are offering.
- Review departing employees’ pay – they may have left because their salary was too low, so don’t automatically advertise the role at the same rate.
- Decide what skills or experience justify a higher salary for the role and which you’re willing to sacrifice in return for a lower salary.
- Think about your benefits package – you don’t necessarily have to offer the same pay rates as your competitors if you offer perks such as flexible working or additional holiday.
| HEALTH & SAFETY
Michael Ellerby, Editorial Board Member, Health & Safety Adviser and Risk Assessment & Compliance |
How to Reduce the Risk Posed by Hazardous Substances
Many people are confused by the COSHH regulations, the Control of Substances Hazardous to Health, with some believing (often incorrectly) that they do not have chemicals or hazardous substances on their premises. In reality, few workplaces do not have any substances that are hazardous to health present and often, employers overlook familiar substances such as cleaning products, drain cleaners, pesticides, etc. As with all risk assessments, think about your business operations, the work environment and your workers.
You can start with two simple steps: 1. Make an inventory and, 2. Check the Safety Data Sheets.
How to Make Your Inventory
First, draw up a list, or inventory, of all substances stored, used or produced in the workplace and ensure you consider all aspects of your operations. This list must be comprehensive and should cover all potentially hazardous substances, such as cleaning materials, waste and by-products. In larger companies it is useful to do this on a departmental basis.
Typical substances to add to your inventory include:
- Anything labelled as hazardous (i.e. toxic, corrosive, danger, systemic effects) or displaying a warning sign such as one of these below.
- Any labels displaying hazard statements such as:
- ‘Causes serious eye damage’
- ‘Toxic if swallowed’
- ‘Toxic to the aquatic life with long lasting effects’
- ‘May cause allergy or asthma symptoms or breathing difficulties if inhaled’
- Pesticides and other chemicals used on farms and in estates management.
- Paints or strippers used in decorating and maintenance.
- Harmful micro-organisms (including tetanus from gardening or estates management).
- Any substantial quantities of dust (wood, cements, flour, powders, or similar materials).
How to Use the Safety Data Sheets
Once you have created your inventory, check you have the information about potentially hazardous substances found in the Safety Data Sheet (SDS). These may be obtained from the manufacturer or supplier of the substance. The SDS contains information on the hazards associated with the substance and will help you create a detailed and effective risk assessment.
The SDS will contain information in 16 sections. First, check that you have the correct SDS and look at the Hazards Identification section to understand if it is hazardous or not. Lots of other important information is provided (such as First Aid information, storage conditions, spillage response, and other data). Check through the information carefully and use it to inform your COSHH assessment.
Substances Without Safety Data Sheets
However, some substances are exempt from the need to provide a SDS such as cosmetics, pharmaceuticals, wood, etc. This does not mean that they are safe.
Be aware that some substances are also generated in the workplace and so will not come with a SDS. Examples include: welding fume, wood dust (from sanding or sawing) and construction dust (which may include silica dust) from drilling or similar operations. Never dismiss such exposures as insignificant – about 40% of deaths caused by occupational cancers are from the construction industry, where many of its work activities generate their own harmful substances.
By making a detailed inventory using the information provided, you can create a robust risk assessment that will reduce your employees’ risk of exposure, keeping them safe from chemicals and other hazardous substances.
| PAYROLL
Sarah Bradford, Editor-in-Chief, Pay & Benefits Adviser |
Benefit from these Tax Breaks for Christmas Parties
If, as an employer, you are planning on holding a staff Christmas party this year, you may be able to benefit from a dedicated tax exemption to ensure that your employees are not taxed on the resulting benefit-in-kind. If you are able to ensure that your Christmas party falls within the scope of the exemption, you will escape a Class 1A National Insurance liability.
Understand the Exemption
The relevant exemption is the exemption for annual parties and functions. It applies where the following conditions are met:
- The event is an annual party or similar function.
- The event is provided for the employer’s employees generally, or for those at a particular location.
- The cost per function, or where there is more than one annual function in the tax year, the aggregate cost, is not more than £150 per head.
Defining an Annual Event
The exemption only applies to ‘annual’ events. This is an event that happens once a year on a recurring basis. Consequently, one-off events fall outside the scope of the exemption. This means that if you do not usually hold a Christmas party but decide to hold one this year, the exemption will not apply and your employees will be taxed on the resulting benefit.
Must be Provided for All Employees
Even if the Christmas party is an annual event, the exemption will only be available if all your employees are able to attend. If you operate from more than one site, an annual party that is open to all staff at a particular location will also qualify. HMRC have confirmed that where workers, or those at a particular site, are organised into teams or departments, annual departmental or team events will fall within the exemption, as long as all employees at the site are able to attend a Christmas party.
Cost Per Head
The exemption only applies where the cost per head is not more than £150. If you hold more than one annual event each year, the exemption applies where the cost in aggregate is not more than £150.
It’s important to note that the £150 figure is an exempt amount – not an allowance – and where the cost per head is more than £150, the whole amount is taxable, not just the excess over £150. Where multiple annual events are held in the tax year, the £150 per head figure can cover ‘whole’ events, and if the total cost per head of all annual events in the year is more than £150, you can choose which functions can benefit from the exemption.
Attendance at annual events does not need to be restricted to employees – guests can also attend. The cost per head is the total cost of the function, including any transport and accommodation provided, inclusive of VAT, divided by the total number of people attending. The total attendees includes the employer, the employees and any guests.
Where a function falls outside of the exemption, the amount charged to tax is the cost per head of the employee’s attendance, plus that of any guests that they bring.
Use a PSA to Settle Any Liability
If you want to meet any tax liability falling on your employees as a result of their attendance at your Christmas party, you can do so by including it in a PAYE Settlement Agreement (PSA). If you do not already have this set up, you will need to either amend an existing PSA, or agree one with HMRC, to include the Christmas party. This must be done before 6 July 2022.