Is your business ready for the next round of Gender Pay Gap reporting?

It doesn’t seem that long since the inaugural gender pay gap reporting deadline, however there’s now less than six months until the next deadline of 4 April 2019 (for the private sector) or 30 April 2019 (for the public sector).

In April, the first wave of reporting across 10,000 organisations employing more than 250 staff revealed that more than three-quarters had a median pay gap that favoured men. More than half of those companies paid higher bonuses to men, while 80 per cent had more women working in low-paid roles than in senior positions.

The figures provoked, in many cases, both media interest and questions from employees. And while the reporting regime was seen by many as imperfect, it did shine a light on important issues around equality of opportunity and barriers to progression.

The assumption among many businesses, however, is that they will be able to demonstrate progress by the time they submit their 2019 figures. Many have promised employees as much. But they may end up being disappointed.

For starters, reported figures are based on a one-day snapshot of a business’s payroll the previous April, which means it will take time for change to filter through.

Experts don’t expect to see a fundamental change to these figures as organisations only really started paying attention to their figures at the point they had to publish, so unless a company carried out a radical intervention, such as a restructure, there won’t be a major shift.  Gender pay gap reporting is best viewed over a longer time frame.

Additionally restrained wage growth and limited budgets are making it difficult to redress the balance, particularly in sectors such as retail, which are dealing with rises in the minimum wage.

The average median pay gap last year was 9.7 per cent, and for some notable businesses such as Ryanair (72 per cent) and HSBC (59 per cent) there is plenty of scope for improvement. But if your gap is below average, incremental gains become comparatively more difficult. Some measures companies are undertaking – such as encouraging more women into male-dominated industries such as STEM – could actually make figures look worse in the short term because they impact primarily at graduate or apprenticeship level.

This matters not just in terms of employee relations but also because in future, businesses failing to address gender pay gaps could put off potential investors and shareholders.

Experts agree companies are mostly taking the gaps seriously with many analysing female labour flow, including the points at which women are promoted and when they’re exiting the company. Others are having ‘constructive dialogues’ around job flexibility and mentoring.

There also appears to be closer scrutiny from HR reviewing the entire employee life cycle. Many companies now run gender-neutral job adverts, have introduced flexible working and have launched mentoring schemes. This is matched by an increase in transparency around pay structures and alignment with performance, and a decreased reliance on discretionary bonuses.

Gender Pay Gap Overview

The Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 introduced an obligation for larger employers to report on salaries and pay and the differences in pay between men and women. The key points;

 

  • Reporting requirements will apply to each separate legal entity (i.e. the employer) with at least 250 employees within a group structure
  • The legislation focuses on employers with 250 or more employees delivering a report on the 5th April of a given year- you must use your actual headcount – FTE and length of service of employees does not matter.
  • The Equality Act 2010 makes it unlawful to prevent employees from having discussions to establish if there are differences in pay. However, an employer can require their employees to keep pay rates confidential from people outside of the workplace.
  • If an employer argues that ‘they cannot afford to pay’, this will not be a sufficient defence if discrimination on the grounds of sex is the reason for the differences in pay rates.
  • Also to claim that women are paid less than men because they are ‘prepared to work for less’ is not a defence.

Contact Solve today for more help with Gender pay gap reporting.