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Gender Pay Gap Reporting

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It is only since 1997, that any disparities between the average rates of pay for men and women have been recorded. In 2016, the gap for full time employees was 9.4% in favour of men. One interesting detail to these figures is that the gap develops from the age of 40 onwards. Until this point, men and women have similar pay. One factor which influences this is the time women take out to have children and the figures indicate that the effect of this inequality becomes more marked in their later years. The Equal Pay Act has been in force since 1970 but recent news items have demonstrated that nearly 50 years later equal pay between the sexes has still not been reached. A senior editor for the BBC, Carrie Gracie, recently resigned over what she described as “unlawful pay discrimination”. The BBC is just one organisation which has come under scrutiny over the differing level of salaries it pays to some of its male and female presenters.

Over the last few years the Government has stated its intention to redress this balance. On 6th April 2017, Gender Pay Gap Reporting came into effect for large private and voluntary sector employers, being those with 250 or more employees. On 5th April each year, they must now publish data in relation to their gender pay gap. These obligations include the provision of:

  1. Overall gender pay figures (including mean and median average hourly pay);
  2. The proportion of men and women in each of the four pay bands over the employer’s overall pay range;
  3. Information regarding the employer’s gender bonus gap;
  4. The proportion of male and female employees who receive a bonus in the same 12 month period; and
  5. A written statement confirming this information is accurate and signed by a senior individual.

An annual report must be published on line and be publicly available for three years. The relevant data must be published within 12 months of 5 April each year, so the first of the reports have been published in recent weeks, in the run up to April 2018.

Employers who are caught by these regulations may include a narrative explaining any pay gaps and set out a plan of action to narrow any gaps. In looking at recently published reports, generally businesses which have a substantial gender pay gap have sought to provide such an explanation. An example of such is provided by Virgin Money. Virgin had identified a gender pay gap, when their data was analysed through initial voluntary reporting. Virgin explained that this gender pay gap has decreased from 36% in 2016 to 32.5% for 2017 and set out its plans to achieve a gender pay balance by 2020. This is a common approach being taken by businesses – setting an agenda with a target to reduce the gender pay gap allows for the company to admit it has a gender pay gap, but, and most importantly, it is acting on it.

As expected, so far the new gender gap reporting obligations have exposed some interesting figures, which can be found on the Government website here.

As for the BBC, it was revealed that it had a gender pay gap of 10.7%, perhaps supporting Carrie Gracie’s stance. However, it is important to remember that the gender pay gap reporting is to bring about equality for both men and women. In some cases, the figures reveal that it is male employees who are disadvantaged. One example of this is Unilever UK Limited, which posted a gap of 8.8% higher for their female employees. At present the obligations relate to employers with 250 or more employees, but it is anticipated that the regulations will be extended in the future to smaller employers. The Government hopes that, with businesses having to publish these figures, public pressure will force reforms internally to level the playing field between the genders.

If you would like to discuss any of the issues mentioned in this article, feel free to contact our employment team directly.

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