05/10/2019
What is going to be considered ‘Equitable’ and ‘Tolerable Gaps’ in Remuneration going forward?
What would be the acceptable tolerance level of gap
between the top and lowest income earners in an organisation is what the Department of Labour is intent on establishing.
The revised EEA4 requires this information from designated employers with a view to identifying the highest versus the lowest remuneration paid. Ultimately the idea is to set Sector benchmarks and norms between these earners. (There are 18 Sectors identified and designated employers are required to identify under which one they operate when submitting their report).
At the recent roadshow, organisations were advised that the results of the survey will be published, and the message also given was clear, in that, if an organisation pays outside the ‘norm’ and does not comply, this would be considered a contravention and enforcement will ‘kick-in’. The question was raised as to what the Department of Labour was hoping to gain by identifying the gap between the CEO and Cleaner? The response was that they wanted to determine if the level is a ‘tolerable’ one as “CEO’s get Millions in bonuses and the lowest of the lowest only get by ‘chanting for more!”
In line with the EE Plan and Report, organisations should already be doing annual audits and the remuneration committee in place to review ‘equal pay for equal value’ is practiced. The principle is based on the ‘inherent requirements of the job’. However, the focus here is going much deeper to identify any disparities between genders, as per example. When planning, if the organisation is found to be outside the ‘norms’ they must review their policy to align to what has been recommended. The question ‘do you have a policy in place’ to determine remuneration levels fairly and guide these structures in the organisation? If not, there are many companies who don’t, best get started on one. (‘Willy-nilly’ salaries offered will not be ‘ok’).
One reason (only 1) must be given to explain the gap in remuneration whether it falls under the ‘fixed’ or ‘variable’ category. Interesting times ahead when one thinks about the global leaders whose salaries will need to be translated in Rand terms for purposes of the report and those on the Learnerships receiving a stipend… Yes indeed, interesting times ahead.
Visit www.smartmoveshc.co.za for more info!
