Gender Pay Gap Reporting is nearly here

Gender pay gap issues have never been far from headlines over recent months, and now the date is drawing close for companies of over 250 staff members to report their gender pay gap (the average difference between men and women’s aggregate hourly pay) by the end of April 2018.

The average woman earns around 80p for every £1 earned by a man in the UK, and equal pay has remained elusive despite legislation like the Equal Pay Act of 1971 and the Sex Discrimination Act of 1975. Deloitte estimates that the gender pay gap will not close until 2069.

More than 8,000 businesses across the UK are legally obliged to report:

  • The gap between average pay of male and female employees
  • The number of men and women in each quartile pay band (where each band represents an equal number of employees when ranked in order of pay);
  • The gap in average bonus payments made to male and female employees, and;
  • The proportion of male and female employees who receive bonus pay.

With a greater level of transparency, the new legislation means businesses will encourage businesses to discuss their approach to pay, opening the topic up on a large scale. Companies who show a low gap have the added benefit of looking attractive towards new talent, which is good for business growth as well as equality.

As the report has to be published on each eligible organisations own website, some organisations have already sought to close their pay gap in the run up. The gender pay gap reporting allows male orientated industries to attempt to change perceptions, in industries such as construction, engineering and politics, and in top positions.

The government cannot force organisations to rectify any gender pay gap, but it is advisable to provide a summary of justifiable reasons with the published findings, as a poor record could affect your recruitment efforts, and could impact on your own employees’ morale.

Research by ONS found that:

  • More women work part-time than men, leading to a larger pay gap overall
  • Since 1997 the gender pay gap has narrowed for full-time workers but widened for part-time workers
  • A higher proportion of women work in jobs that tend to be lower-paid
  • From age 40 the gap widens significantly.

A gender pay gap is a basic measure of the average differences in pay between male and females, however Law firm Gowling WLG gives the following explanation about the confusion between equal pay and the gender pay gap:

“A lot of confusion exists about the correlation between gender pay parity and equal pay. Although often treated as one and the same thing, in reality they are quite different. A gender pay gap is a basic measure of the average differences in pay between male and female employees. Equal pay, on the other hand, is a specific legal concept that requires that men and women are paid the same for equivalent work. That might mean:

  • exactly the same job;
  • different work that is of ‘equal value’ in terms of the demands made on the individuals (by reference to factors such as effort, skill and decision-making); or
  • work that has been rated the same as another in a job evaluation study.

Unlawfully discriminating, by failing to comply with existing equal pay laws, may be one factor impacting on an organisation’s gender pay gap. In practice, though, a wide range of other factors is likely to influence the figures, such as the underrepresentation of female employees in senior management roles and the fact that many of the traditionally lower paid occupations are still predominantly carried out by women.

It’s possible that some employers with a relatively high gender pay gap could be fully compliant with equal pay legislation because of the particular demographics of its organisation. Conversely, some employers with relatively low gaps may not be compliant because they are discriminating between men and women in comparable roles.”

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