What Does Gender Pay Gap Reporting Reveal?
Much has been reported in the news over the past week about the Gender Pay Gap. With the deadline having now passed for organisations employing over 250 employees to publish their pay gap data, what do the results tell us?
What Does the Data Show?
Over 10,000 public, private and charity sector employers have now published their reports. The headline figures suggest there is a significant gender pay gap in the UK. However, it is important to draw a distinction between a gender pay gap and unequal pay.
Under the Gender Pay Gap Reporting Regulations, qualifying employees are required to report on the average pay of male and female employees in their organisation. The "average" is calculated in two ways:
- as a median, being the middle point between the top and bottom range of pay
- as a mean, being the total amount paid to male and female employees, divided by the number of people in each group.
The data published therefore represents the difference between the average pay of men and the average pay of women.
Unequal pay on the other hand, is the difference between how much men and women are paid, on a like-for-like basis, for carrying out the same or similar work. Whilst a gender pay gap may be symptomatic of a wider issue, ie fewer women being employed in the highest paid positions compared with men, the reported gender pay data is not necessarily evidence of unequal pay.
What Happens Next?
For those organisations which have reported, it is worth bearing in mind that this is an annual process and it is not too soon to begin thinking about what your figures will show next year. The option to provide a written narrative alongside your gender pay gap figures provides a valuable opportunity to put your figures in context, explain the reasons behind your results and set out details of any actions you have taken to reduce or eliminate the gender pay gap over the year.
For those organisations which are required to report but have not yet done so, the Equality and Human Rights Commission has made clear that it intends to investigate and pursue a staged approach to enforcement. This will involve sending letters on 9 April which require a response within 28 days.
Ultimately, the Commission has powers to apply to the court for an order requiring compliance. Failure to comply with such an order could result in unlimited fines. The Commission also intends to publicise the names of those organisations which are investigated for non-compliance and it would therefore be wise to also consider the possible negative publicity of failing to report.