What is Gender Pay Gap Reporting?
Since 2017 certain employers have had to follow regulations which require them to report data showing if they have a gender pay gap. A gender pay gap is the difference between the average (mean or median) earnings of men and women across a workforce. Gender pay gap calculations are based on employer payroll data drawn from a specific date each year, which is known as the ‘snapshot date’.
Does my company have to do this?
The Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 require all private and voluntary sector employers with 250 or more employees to undertake gender pay gap reporting. There is a similar provision made by The Equality Act 2010 (Specific Duties and Public Authorities) Regulations 2017 applicable to specified public sector authorities.
A bill has been proposed in parliament to reduce the number of employees to 100, which would bring more employers into scope, but this has not currently been approved.
Where are the results published?
Result are published on the gov.uk website here: https://gender-pay-gap.service.gov.uk/, where you can search for certain employers.
As well as showing the statistical data, employers also have an opportunity to publish a written explanation of their figures. Some employers will also elect to circulate data and accompanying narrative internally first, so that employees can see it and ask any questions.
Has anything changed as a result of Covid?
The Equality and Human Rights Commission (EHRC) have announced that enforcement of gender pay gap reporting for the 20/21 reporting year will not begin until 5 October 2021. The EHRC is encouraging employers to report ahead of the usual deadlines in March and April wherever possible, but no enforcement action will be taken providing they report by 5 October 2021, given the challenges many employers have had in addressing the Covid-19 pandemic.
However, commentators have noted that whilst this delayed deadline will be a relief to many employers, Covid could mean that the figures for the past year are not representative, due to the impact of reduced pay during furlough leave on the data.
My Company has fewer than 250 employees. Does this mean we don’t have to worry about equal pay unless the law changes?
No – although you do not have a legal obligation to report on whether or not you have a gender pay gap, equal pay is still important for many reasons. Aside from the obvious ethical implications, a transparent pay structure which allows people to progress based on their role and performance, can be important for attracting and retaining the best employees.
Employers with fewer than 250 employees still have obligations under the Equality Act 2010 to ensure that men and women in the same employment performing equal work must receive equal pay, unless any difference in pay can be justified.
How can Companies help to ensure equal pay?
Potentially beneficial practices to help ensure equal pay include:
- Undertake regular job evaluations and benchmarking;
- Ensure employees who have responsibility for activities such as recruitment and selection receive suitable training in areas such as unconscious bias;
- Ensure there is a transparent process for deciding what salary is offered to new starters and existing employees who are promoted;
- Review your pay data to spot anomalies and trends on a regular basis (even if you do not have a legal obligation to report your data).
It is also important to remember that gender pay discrepancies are not the only potential area of discrimination to look out for; for example, according to government data:
“In 2020, the mean ethnicity pay gap, which is the difference between the average hourly pay between BAME and non-BAME staff, is 29.3%.”
What happens if Companies get it wrong?
A case brought by 35,000 shop floor workers at Asda has recently reached the Supreme Court. The Supreme Court found that the pay of shop floor staff (who are mostly female at Asda) and distribution centre employees (mostly male) can be compared with one another, even if the two groups of workers are not based at the same establishment. This means that any discrepancy in pay between the two roles could constitute a failure to pay men and women equally. Whilst this is an exceptional case due to the size if the business, it is estimated that the compensation due to the shop floor employees could amount to £500m.
Can ViewHR help with equal pay, salary reviews and compensation planning?
ViewHR are experienced in the field of compensation. We often support businesses with compensation restructure projects including benchmarking, pay grading, salary structures, and variable compensation recommendations.
When it comes to Equal Pay audits, we work with a range of HRM systems along with manually crunching the numbers and are able to assist employers not only with preparing but also in understanding the data. We can then assist with developing a strategy to address any concerns identified. Get in touch with the team today to find out more.