Mind the Pay Gap - What Schools Need to Do
The government has now published draft regulations with the aim of tackling the gap in pay between genders (which is still estimated at 19.2%).
Further to our article in the January edition of the Schools Law Brief, the government has now published draft regulations with the aim of tackling the gap in pay between genders (which is still estimated at 19.2%).
The Equality Act (Gender Pay Gap Information) Regulations 2016 are now open for a period of consultation and will come into force in October 2016. They will require employers with over 250 employees to publish information relating to the gender pay gap within their organisations.
Schools will need to be prepared to capture the relevant data in April 2017, with the first reports required by April 2018. The reports must be published on the employer's website every year, and left there for at least three years. The information must also be uploaded to a government website.
Employers will have to establish their full pay range and then divide this into four quartiles for the purpose of publishing the information. The objective is to identify where women are concentrated across the pay range and, if there is not an even spread, prompt scrutiny as to whether there are any obstacles to their progression.
Employers will have to publish the mean pay gap, to identify whether women are over represented at the low earnings end of the spectrum and under represented at the high earning end. It will also be necessary to publish the median difference, in order to represent the 'typical' difference, so this will not be skewed perhaps by a couple of high earners amongst the senior leadership team.
Pay will include basic pay, bonuses, maternity pay, sick pay, shift premiums and other allowances. It will not include overtime, the value of salary sacrifice schemes or benefits in kind.
Schools employ staff on a diverse range or working arrangements and patterns. They will be required to calculate an hourly pay rate, to generate average figures which are not affected by the number of hours worked.
What are the potential risks for schools?
The government's initial intention is for employers who do not comply to be 'named and shamed', and will review whether civil or criminal penalties for non-compliance should be introduced in due course. However, this will have significant consequences for the reputation of schools if the information identifies pay differentials between men and women which is likely to undermine the values and ethos they aim to promote.
The information could also be used by employees and their trade unions to challenge pay, with the threat of equal pay litigation where differences in pay are identified. The greatest risk of equal pay claims (at least initially) is by individuals of different genders who are undertaking similar work, or work of 'equal value' but are paid differently, perhaps for historical reasons. The large equal pay claims in the public sector also arose from a comparison of jobs which attracted a gender bias, for example grounds staff and catering staff, where there were inconsistencies in pay rates or other financial terms.
What steps should schools be taking now?
Schools have some time to get to grips with how they are going to gather and calculate the required data in order to formulate the reports. However, schools should take some steps now to ensure they understand what data they need in order to comply with these requirements, and that they have appropriate systems in place to capture and calculate this.
Schools should also take this opportunity to review their pay policies to ensure they are legally compliant and transparent. If schools have concerns that there are inconsistencies amongst employees' pay which may be highlighted by the reporting requirements it is a good time to identify these and take appropriate steps to address any discrepancies.