As of 4 April 2018, all companies in Great Britain with 250 or more employees became subject to an obligation to publish statutory calculations, showing the extent of the pay gap between their male and female employees, in accordance with the Gender Pay Gap Regulations (Regulations) which came into force in April 2017. The information has to be provided to the Government Equalities Office and published on the company’s website.
So…what is the Gender Pay Gap?
It’s the difference between the average earnings of men and women. While it’s always been a topic that garners a great deal of interest, it wasn’t until April 2017, when the Government effected the Regulations, that compulsory reporting was introduced.
As matters stand, while the gender pay gap has gradually reduced over the last ten years throughout the UK (in April 2017 it fell to 9.1% for full time employees, its lowest level since records began in 1997), it remains in favour of men. The Office for National Statistics has reported as follows:
- The gender pay gap for full time workers remains entirely in favour of men for all occupations.
- Holding all other factors constant, in 2017 women’s pay growth in respect of age was lower than men’s and growth stopped at a younger age.
- The lowest-paid occupation group – caring, leisure and other service occupations – has a higher proportion of full-time employees who are women (78%).
What do you need to do to comply?
If you are a private employer with 250 or more employees, you should have published your gender pay gap data on or before 4 April 2018. Going forward, you will need to produce and publish an annual report for any year in which you have a headcount of 250 or more employees as at 5 April, the snapshot date.
In calculating your headcount, you must count not only employees, but also ‘workers’ and even some self employed people.
What if you don’t?
The Equality and Human Rights Commission (ECHR) is responsible for ensuring employers publish their gender pay gap data as required and has indicated that it will approach employers who fail to do so informally in the first instance. This is because the Regulations do not, at present, contain any enforcement provisions or sanctions for non-compliance, something that has resulted in a high degree of criticism.
That said, the Regulations do make it clear that failing to comply is ‘unlawful’ and the ECHR is consulting on the issue of enforcement action with a view to considering imposing formal investigations, court hearings and unlimited fines in future.
And…as for the results?
As things stand, companies that have a wide gender pay gap will not be subjected to any form of punishment. The government has however, stated that it will carry out checks and reviews of non-compliance and publish sector-specific league tables highlighting which companies are failing to address the issue.
The reality is however, that the greatest pressure to tackle gender pay gap problems may well come from a company’s existing employees or from an inability to recruit good staff. According to figures cited by the Government in its response to the ‘Closing the Gender Pay Gap’ consultation, 84% of women aged 16 to 30 would consider an employer’s gender pay gap when applying for a job and 80% would compare prospective employers’ gender pay data when looking for work.
Whatever the impact of the Regulations, within five years of their commencement, the Secretary of State is required to review and publish a report on their effectiveness, setting out a view as to whether they meet their key objective, namely reducing the UK’s gender pay gap.
So for now, it’s a case of watch this space and mind the gap.
For more information or to discuss Gender Pay Gap Regulations further please email Amy White, Employment Solicitor: firstname.lastname@example.org.