In April 2017 the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 came into force. These regulations require all those employers in the UK with 250 or more employees to produce a report on the gender pay gap within their organisation.
The first round of annual reports had to be published by April 2018. On the 1 August 2018, the Government Equalities Office (GEO) confirmed that all 10,000 employers, to whom the gender pay gap reporting obligations apply, have now published their data. The results can be found by clicking here: Gender pay gap data.
The UK is one of the few countries in the world that requires employers to provide such comprehensive data. It is encouraging that employers complied without the need for sanctions. Many employers have gone beyond the minimum requirements by including narratives, giving context to the pay gap and in some cases explaining steps being taken to reduce the gap.
Some of the key findings of the reporting are:
- 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.
Penny Morduant, Minister for Women and Equalities criticised the findings, commenting that they were ‘appalling’. Clearly more needs to be done in order to make the gender pay gap a thing of the past. Coincidentally, the House of Commons’ Business, Energy and Industrial Strategy (BEIS) Committee published a report on gender pay gap reporting, following their own inquiry which was launched in March 2018. They outlined a number of recommendations:
- Extend the reporting requirements to employers who have 50 or more employees from 2020
- Make it compulsory for the report to include a narrative explaining the disparity and be accompanied by an action plan to tackle the gap
- Give the Equalities and Human Rights Commission enforcement powers to levy fines for non-compliance.
The BEIS report can be found by clicking here: Closing the gender pay gap - businesses must drive change.
The BEIS are not alone in giving recommendations; the GEO also published “What Works” which provides evidence-based recommendations for employers to close the gap. This includes guidance on the recruitment and progression of women. The GEO information can be found by clicking here: Actions to close the gender pay gap. There is a helpful section under ‘effective actions.
It is important to point out that ‘equal pay’ and ‘gender pay gaps’ are different. Equal pay laws apply when one employee, often a woman, is being paid less than a man doing the same or equivalent job.
A gender pay gap only shows the difference in the average pay of male employees against the average pay of women employees, across the whole organisation.
Whilst we have come a long way from 1997 when the median gender pay gap in the UK was 27.5% (the most recent ONS figures put it currently at 18.4%), clearly there is a lot of work to be done and we are delighted to see that the government and employers alike are taking the matter in hand.
Whilst the results are concerning and the reasons for them numerus and complex (and beyond the remit of this article), we welcome the increased transparency and consider them necessary to encourage employers to consider how more to be done to closer the gender pay gap.
What will be most interesting is when organisations start publishing their second pay gap reports for 2018/19. How will organisations explain pay gaps that have increased and what publicity will this attract?
If you have any concerns regarding your organisations’ obligations on gender pay gap reporting or other matters concerning equal pay, discrimination etc., then please do not hesitate to contact one of our employment team.