Equal pay for men and women is one of the most talked about issues so far this year. Interest in this topic sored last month when the BBC found itself in a media storm, following the publication of salaries paid to its highest-earning talent. The report published by the BBC revealed that only one-third of its 96 top earners were women and the top seven were all men.
In addition to the BBC’s gender pay gap exposure, staffs at the Financial Times have threatened to strike over the paper’s reported 13% gender pay gap.
Both of these high profile cases continue to draw attention to the new obligation whereby large employer must publish their gender pay gap information under the Equality Act 2010 (Gender Pay Gap Information) Regulations that came into force on 6 April 2017.
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 the 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 of the new reporting obligations 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.
Our employment law expert, Laura Kirkpatrick says:
“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.”
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.
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 per cent. 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. Future strategy showing a commitment to closing the gap can also be addressed in the written statement that must accompany the statistics.
Laura advises that:
“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.”
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.
In light of the new Regulations and media attention would advise companies, whether or not they have 250 employees, to start collecting and analysing pay data now. Our Government has committed to addressing the pay gap meaning these Regulations could be extended in the future to all employers. Therefore a key strategy for any company should be reviewing gender equality within their business and taking steps to reduce or eliminate it.
If you would like to know more information about Gender Pay Gap Reporting, how it impacts on your business and what you need to do to comply, please contact Laura.