Almost five decades have passed since equal pay legislation was introduced and yet some women still earn less than men for doing the same work. The current UK gender pay gap stands at just over 18%.
With a view to eliminating the gender pay gap in a generation, later this year the government will be introducing new regulations requiring large employers, including the public sector, to publish their gender pay gap and gender bonus gap.
The gender pay gap looks at average pay differences between men and women across an entire organisation, in contrast to equal pay which focuses on the differences between men and women who carry out the same jobs, similar jobs or work of equal value.
It is expected that greater transparency around the gender pay gap will enable employers to identify new opportunities to increase female participation in their workforce, as well as increasing employee confidence in the remuneration process. The evidence provided by gender pay gap reporting will also be used by the government to look at whether other initiatives are required to narrow the gender pay gap.
The regulations will apply to all private and voluntary sector employers with at least 250 ‘relevant’ employees.
Large employers will be required on an annual basis to publicise details of the rates at which they pay female employees compared with male employees including:
- the difference between the mean and median hourly rates of pay between male and female full pay employees;
- the difference between men and women’s mean and median bonus pay over a 12-month period;
- the number of men and women in each of four groups based on the organisation’s overall pay range; and
- the proportion of males and females who have received bonuses.
Organisations will have up to 12 months from April 2017 to publish this information and should be making their payroll aware about these reporting obligations.
Although only large businesses will be expected to highlight their gender pay gap next year, given the likely increase in media interest and employee awareness following the publication of the first reports, employers of any size could face a surge of challenges by staff regarding perceived pay differences in workplace. Equal pay claims are often complex and expensive to defend, with substantial amounts at stake.
All employers should consider taking steps now to identify whether potential gender pay disparity exists within their organisation. Unfortunately there are no easy solutions for employers if such pay disparity is identified, but simply ignoring the problem and hoping it will go away is unlikely to be an option in the future.
Nicola Butterworth and Graham Irons will be discussing the law surrounding equal pay issues and the reporting requirements, including defences to equal pay claims and handling an equal pay grievance at the next Norfolk Chamber of Commerce HR forum on 22 March 2017. The session will also look at future legal reforms and recent case law decisions and identify how these developments will impact on local businesses.
To book a place please visit the event page