Gender Pay Gap

You’ll remember the furore surrounding the BBC being forced to reveal the salaries of its top stars earlier this summer.

The Beeb had expected to face tabloid fury over the top rates of pay – but instead came under fire for the apparent discrepancies between what it paid its top male stars and its top women presenters.

Well, soon this debate is likely to sparked into life again – with even more ammunition.

That’s because earlier this year gender pay gap reporting was introduced in the UK when the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 came into force.

Sounds boring doesn’t it?

But the ramifications of the new act could be far reaching.

Here’s why.

All private and voluntary sector employers with 250 or more employees must now publish the results of their gender pay gap analysis on their websites by 4 April 2018. Organisations must measure their gender pay gap in up to six different ways:

  • Mean gender pay gap: the difference between the mean hourly rate of pay of male full-pay relevant employees and that of female full-pay relevant employees.
  • Median gender pay gap: the difference between the median hourly rate of pay of male full-pay employees and that of female full-pay relevant employees.
  • Mean bonus gap: the difference between the mean bonus pay paid to male relevant employees and that paid to female relevant employees.
  • Median bonus gap: the difference between the median bonus pay paid to male relevant employees and that paid to female relevant employees.
  • Bonus proportions: the proportions of male and female relevant employees who were paid bonus pay during the relevant period.
  • Quartile pay bands: the proportions of male and female full-pay relevant employees in the lower, lower middle, upper middle and upper quartile pay bands.

The results must remain on the website for at least three years and analysis be uploaded to the Government’s reporting website.

This will produce a mountain of new information about pay in Britain – and inevitably raise issues about equality and fairness.

The new scheme is different from an equal pay audit required by an employment tribunal if an employer is found guilty of pay discrimination. Gender pay gap reporting doesn’t specifically ask who earns what, but what women earn as compared with men.

For many employers, the new legislation raises the prospect of staff bringing equal pay claims if the figures show a significant difference in pay for men and women doing the same work.

There is a risk that, where significant differences between the average ordinary or bonus pay of men and women are reported, gender pay gap reporting could draw attention to these, possibly leading to equal pay claims. It’s a good idea to consider any risk of equal pay claims as part of both your communications plan and the action plan that you draw up to deal with the gender pay gap.

So, is an action plan required?

The regulations do not require you to publish an action plan, or even to draw one up, but HR Solutions Shropshire encourages you to do so. In addition to helping you tackle the gender pay gap itself, drawing up an action plan will help you to answer questions about what you are doing.

What might happen in the future?

The regulations will be reviewed in five years’ time. Matters such as the headcount of relevant employees could be re-examined – with the possibility of it being lowered to, say, 150 employees – as will the effectiveness of the regulations themselves. If compliance levels are low, sanctions for non-compliance, including fines, might be introduced.

Another possibility is that reporting might be extended to race, disability or age.

Whatever the future holds, this is an issue which seems unlikely to go away. For help and advice on how to tackle it, contact HR Solutions Shropshire today.

 

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