12th April 2017
New for employers in 2017 The Equality Act 2010 (Gender Pay Gap Information) Regulations compels companies with 250 or more employees to publish statutory calculations every year showing how large the pay gap is between their male and female employees.
There are many reasons why the pay gap exists; ingrained discrimination, the dominance of men in the best paid positions, unequal caring responsibilities.
The gender pay gap refers to the difference in average pay between men and woman, which the Office for National Statistics works out using median hourly earnings figures for UK employees.
Gender pay reporting is different to equal pay
Equal pay deals with the pay differences between men and women who carry out the same jobs, similar jobs or work of equal value. It is unlawful to pay people unequally because they are a man or a woman.
The gender pay gap shows the difference in the average pay between all men and women in a workforce. If a workforce has a particularly high gender pay gap, this can indicate there may several issues to deal with, and the individual calculations may help to identify what those issues are.
- An employer must comply with the regulations for any year where they have a ‘headcount’ of 250 or more employees on 5 April, but employers of all sizes should consider the advantages.
- A wider definition of who counts as an employee is used here (from the Equality Act 2010). This means that workers are included, as well as some self-employed people. Agency workers are included, but counted by the agency providing them.
- These regulations apply to the private and voluntary sectors but the government is aiming to include the public sector by April 2017 too.
- Gender pay reporting is a different requirement to carrying out an equal pay audit.
- There are six calculations to carry out, and the results must be published on the employer’s website and a government website within 12 months. They must be confirmed by an appropriate person, such as a chief executive.
- Employers have the option to provide a narrative with their calculations. This should generally explain the reasons for the results and give details about actions that are being taken to reduce or eliminate the gender pay gap.
What are employers expected to publish online?
- the overall gender pay gap between men and women in their organisation using mean and median average hourly pay
- the proportion of men and women in each pay quartile
- information on the organisation’s gender bonus gap
- the percentage of men and women that received a bonus in the preceding 12-month period.
Where will these reports be published?
The reports must be published annually on the company’s own website and a designated Government website. There will be no sanctions for non-compliance per se, however the Government has said it will highlight and identify those publishing full and explanatory reports.
What is required by employers
- ensure you can collect the range of data through your payroll systems as a first step towards analysing it. Make sure your payroll software or outsourced provider can give you that detail.
- To review of all current pay practices across your organisation to understand the differentials which may exist. Be proactive – doing nothing is not an option. Understanding your pay arrangements will help you manage and present information meaningfully and in context
- consider gender pay gaps which exist on a departmental/geographical/functional level and compare these with the composition of your workforce
- analyse the rationale behind your current arrangements to identify potential risk areas
- If pay gaps are due to underrepresentation of women at more senior levels, look critically at what you are doing to attract, recruit, develop and retain female employees
- prepare a communications plan so that you are better placed to present information in a considered way and are ready to respond to challenging questions from employees, unions and the media
It is shocking that in 2017 that we even have the issue of pay inequality. However, being paid less as a woman for doing work which is of equal value and that demands equal skill is still a major issue across the UK.
It is as important for men to be vocal on this issue as women confronting issues around work-life balance and in stamping out the stigma around asking for change. Gender pay reporting could be the start to bridging that gap.