Gender pay likely to stay in the spotlight

14th August 2017

Gender pay likely to stay in the spotlight

The BBC found itself in a media storm last month, following the publication of salaries paid to its highest-earning stars, which revealed that only one-third of its 96 top earners were women, and the top seven were all men. Since then, staff at the Financial Times have threatened to strike over the paper’s reported 13% gender pay gap.

It’s an issue that is likely to keep on drawing attention, now that larger employers are obliged to publish their gender pay gap information.  The Equality Act 2010 (Gender Pay Gap Information) Regulations came into force on 6 April and some organisations are already publishing their results.

The Regulations apply to all private, public and voluntary sector organisations with 250 or more employees, who must publish details annually of their gender pay gap, for both basic pay and any bonus payments, with first reporting due no later than 4 April 2018.   The information must be published electronically on their own website and on a dedicated government space.

The aim is to measure differences between the average pay of men and women in an organisation, not just whether men and women are receiving equal pay for equal work.  The figures will show the distribution of men and women at different levels across the organisation, highlighting whether an organisation is promoting or appointing women into more senior roles, or whether men are dominating the higher-paid jobs.  If so, then the organisation will have a gender pay gap, even if men and women are paid equal pay for equal jobs.

Although this will provide greater transparency, it will not provide the sort of detail published by the BBC, which was required to publish the names and salaries of its high earners under its new Royal Charter, to demonstrate its stewardship of public money.

However, implementing the new Regulations is likely to be resource-hungry, with internal systems needing to be configured to generate the figures, and organisations may find themselves wanting to provide a more detailed analysis if they feel the headline information does not give the full picture – for example by breaking down the overall pay gap figure by part-time working or geographical location.

Andrew West, an employment law specialised at Gotelee commented: “There’s a legal requirement for organisations to publish this information, but it’s their corporate reputation that is likely to take a hit if their pay gap proves to be on the wrong side of the national average of 18.1%.  It’s worth getting the information together now, rather than waiting for the deadline, as that will allow time to review the current position, look at underlying causes and put steps in place to address any issues.  The future strategy can be addressed in the written statement that must accompany the statistics.”

Figures must be calculated using the ‘snapshot date’ which is 31 March for public sector organisations and 5 April for businesses and charities, and the data published within a year of the snapshot date, meaning the deadline for companies to publish the first year’s data is 5 April 2018.

Andrew West added: “If a significant pay gap is revealed by a company, the other concern is that they could find female employees challenging why their pay is different from that of male colleagues.  If the difference cannot be justified, there could be grounds to claim gender-based discrimination.”

The data to be published is:

  • mean gender pay gap in hourly pay
  • median gender pay gap in hourly pay
  • mean bonus gender pay gap
  • the median bonus gender pay gap
  • the proportion of males and females receiving a bonus payment
  • the proportion of males and females in each pay quartile

The accuracy of the data must be confirmed in a written statement signed by an ‘appropriate person’ in a senior position, such as a director or partner.

How can our employment law lawyers help?

At present, only public authorities and private employers with a headcount of 250+ are subject to these requirements.  The gender pay gap reporting is different to equal pay –  it 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 still indicate there may a number of issues to deal with, and the individual calculations may help to identify what those issues are. These could include unlawful equal pay differences between men and women who carry out the same jobs, similar jobs or work of equal value, and failing to address those issues could expose you to risk of a claim.  We can help you analyse your results and tell you how to deal with anomalies to reduce your exposure.

 

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