In April 2017, Gender Pay Gap Reporting (inconveniently dubbed GPGR, and not to be confused with GDPR) required all business entities with 250 or more employees to publish an annual gender pay gap report.
The first reports were due by 5 April 2018. The government has recently reported that all 10,000 qualifying employers have published their first round of data.
With the second round deadline looming, explaining poor performance and evidencing efforts may become increasingly difficult for employers of all sizes and sectors.
- The gender pay gap is the gap between average earnings for men and women within a specific organisation. It does not detail ‘unequal pay’ (paying women and men differently for doing exactly the same job, which is unlawful)
- Entities with a headcount of 250 employees on either 31 March (for public sector employers) or 5 April (for private and voluntary sector employers) of each year are obliged to publish their reports within 12 months
- Figures must be published on the employer’s website, and must also be filed on a government website
- Many employers chose to provide a narrative explaining the figures and steps being taken to close any gender pay gap.
How do we explain data? Broadly speaking, a higher mean gender pay gap putting women at a disadvantage will show more men than women are in the top roles within a business, and are receiving the highest salaries. A large median gender pay gap will show that more women fill lower posts, and accordingly, receive a lower salary.
Key findings from the first rounds of reporting:
- 78% of employers pay female staff less than male staff, on average (based on median hourly pay gap)
- 14% of employers reported a pay gap in favour of women
- More than half of employers gave higher bonuses to men on average, than women
- 80% of employers have more women in their lowest paid jobs.
The latest deadline for the second round of reporting is in April 2019. This is based on a ‘snapshot’ of the organisation’s pay and workforce at 5 April 2018. Therefore, many employers will already have the data for the report, many have started analysing it already, and some will start publishing soon.
Broadly speaking, it is hoped that the gender pay gap in businesses would have improved the second time around, after awareness was brought and action plans were put into place. Firms that have shown little change in their gender pay gap, or even an increase, will face questions as to why any measures put into place failed to improve on the gap. Repeating the previous year’s narrative may not fit the bill.
GPGR results are often complex to explain and will be wide and varied - but employers will have to think carefully about how to approach the second round of reporting if there is no improvement in their gender pay gap.
Aside from the second deadline, there has been much political discussion as to whether to extend current reporting rules in various ways.
The House of Commons’ Business, Energy and Industrial Strategy (BEIS) Committee has repeatedly called for the government to be more ambitious, and has recommended:
- The extension of mandatory reporting to employers who have 50 or more employees from 2020
- Making it compulsory (and not an option) for a report to include a narrative explaining differences and recommending plans to bridge the gap
- Giving the Equalities and Human Rights Commission enforcement powers to levy fines for non-compliance.
The government has resisted on these fronts so far, but they have not been ruled out for the future.
If your organisation is required to produce a gender pay gap report, the lesson from the last round of reports is to start early, as it takes time to collate the data, make the calculations and engage stakeholders in producing a report.
Even if your organisation is not obliged to report, over 200 organisations voluntarily disclosed their gender pay gap to signal their engagement with this issue. This is worth considering and may give you the edge if you are obliged to report in the future.