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The Gender Pay Gap in Small Charities

on Monday, 25 October 2021.

Large employers, including charities, with 250 or more employees are required to publish an annual gender pay gap report. The gender pay gap is a measure of the difference between the average earnings of men and women.

The gender pay gap and the right to equal pay for equal work can often be confused. However an organisation can have large gender pay gap without any liability for equal pay if the men and women who work there are carrying out very different roles.

What the gender pay gap can highlight in an organisation that employs a large proportion of women is a workforce where women generally occupy lower paid positions - the traditional paradigm of men occupying the better paid managerial roles, with women taking up the administrative and support roles In turn, this the invites the employer to explore why this may be the case. For example, is female career progression hampered by the organisation's approach to flexible working? This in itself could create a liability in respect of indirect sex discrimination and is therefore something that would need to be addressed.

Due to the impact of COVID-19 pandemic, the Equality and Human Rights Commission (EHRC) changed the requirements for employers to report on the gender pay gap during the pandemic. Employers were not expected to report for the 2019/20 year, however, for the 2020/21 year employers were required to report by midnight on 4 October 2021. Enforcement action started from 5 October 2021 for those who fail to meet this revised deadline.

We Are a Small Charity, Do we Need to Do Anything?

Charities with fewer than 250 employees do not have a mandatory obligation to report. However, as part of ensuring good governance, it is important for all charities, no matter their size, to identify areas in which they can improve, particularly in promoting equality and diversity. Ascertaining whether there is a pay gap due to gender or any other protected characteristic such as age, disability or race is a means of highlighting and addressing any potential areas of disparity or inequality of opportunity.

The Charity Governance Code Steering Group has drafted a code for smaller charities which is made up of seven key principles. These principles include acting with integrity, promoting equality, diversity and inclusion and adopting a culture of openness and accountability. To ensure that your charity is embodying these principles, taking steps to investigate, understand and address any pay disparity is prudent. Auditing your current pay arrangements and identifying any gaps based on protected characteristics will inform potential changes to your recruitment and promotion  processes. It may also be a driver for reviewing other policies around flexible working and equal opportunities to limit your charity's exposure to potential indirect discrimination claims.

Take Action

The Chartered Management Institute (CMI) and the EHRC have together created a toolkit to support all organisations in tackling their gender pay gap  their gender pay gap.

If your charity would benefit from advice in relation to gender pay gap reporting or wider issues around discrimination and equal pay, please do contact Jo Oliver in our Employment Law team on 0117 314 5361, or complete the form below.

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