Laying the foundations for EEA4 compliance

What do we need to do?

wage gap

The EEA4 form that most companies are required to submit has changed substantially and companies are required to report on fixed, variable and total remuneration in the various occupational levels.

The objective of the EEA4 Form is to collect information for the assessment of the remuneration gap between the highest paid and lowest paid employees and, at the same time, to assess inequalities in remuneration in relation to race and gender in the various occupational levels.

EEA4 Form

Equal pay for work of equal value legislation is aimed at eliminating differentiation in pay and prohibits unfair discrimination in any employment policy or practice, on one or more of grounds listed in the legislation, or on any arbitrary ground – including race, gender, age, language and sexual orientation.

A difference in terms and conditions of employment between employees – of the same employer – performing the same or substantially the same work (or work of equal value) that is directly or indirectly based on any one or more of the grounds listed in the legislation – or any other impermissible or arbitrary ground – is unfair discrimination. As a result, it is imperative to maintain remuneration practices and policies that are compliant with the legislation.

wage gap

To maintain equality, it is vital to scrutinise and adjust, if necessary, the following components:

  • Job grades value and compare positions against similar positions. Job grading is a process of evaluating the ‘value of the job’ or sizing the job within an organisation. It forms the basis of a number of remuneration tasks – such as pay scale modelling and salary benchmarking – and ensures that jobs that are substantially the same level of work are positioned at a similar size within the organisation. If equality within grades is maintained then by default the pay of all races and genders that contribute to the sample should be in line with each other.
  • Pay scales are instrumental in controlling the variation of pay that is considered acceptable within an organisation at each level and between levels. Developing a pay scale is a process whereby an organisation sets out an acceptable scale within which pay per grade can vary. When implementing this, the that pay may not exceed the upper and lower limit of the scale per grade. This too will ensure race and gender equality if the organisation as a whole has implemented their pay scale correctly.
  • Good HR and Remuneration structures and practices – founded on accurate, reliable Internal and External Salary Benchmarks – will engage individuals and encourage performance that will drive your strategy. Defensible benchmarks ensure that you are able to meet all governance requirements.
  • Performance Management allows defendable performance scores to dictate why certain individuals may earn more than others, within an acceptable range. Performance management is a process of evaluating each employee’s execution of their role within an organisation and this allows high performers to be differentiated defensibly from poor performers when it comes to reward.
  • A sound Remuneration policy defines the goals and ambitions of an organisations remuneration structure and sits at the heart of all remuneration decisions taken within an organisation. It is critical for defensible remuneration practices and governs the human capital expenditure. Human capital is a key strategic driver of an organisation it is of utmost importance that this is set in line with the strategic goals of the organisation.

21st Century is able to assist with all aspects of compliance – Job Profiling, Job Evaluation, Pay Scales, Salary Surveys and Benchmarking, Remuneration and HR Policy and Strategy, Performance Management and any other Remuneration & HR issues.

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