Gender Pay Gap
5 April 2017 marks the start of the annual “snapshot” date under the gender pay gap reporting regulations. The new rules apply to employers with 250 or more employees. Those employers now have 12 months to produce their gender pay gap reports, have them signed off by a senior executive and publish them on their website.
1. The gender pay report needs to set out six different metrics: the difference in mean pay between men and women; the difference in median pay; the difference in mean bonus pay; the difference in median bonus pay; the proportion of men and women receiving bonus pay; and the proportion of both across four quartile pay bands.
2. The vast majority of employers will have a gender pay gap - there is currently a national gender pay gap of around 18%. Nevertheless, no employer wants to have (or publicise that they have) a gender pay gap. It could, for example, result in reputational damage and put them at a disadvantage in attracting talent ahead of their peers, or even in tendering for work. It might also increase the risk of equal pay claims (as a large gender pay gap could be a sign that there is non-compliance with equal pay requirements).
3. The six metrics which must be reported on under the regulations are a fairly blunt measure of gender pay disparity. They provide no explanation or insight into the underlying reasons for the difference in pay. Employers would be well advised to consider voluntarily expanding the scope of their statistical analysis and setting this out in the voluntary narrative which can accompany their report. Other statistical measures which may present a more accurate or positive picture overall could include, for example, calculating part-time salaries on a full-time equivalent basis, or breaking down the numbers by grade, age or length of service.
4. In addition to a broader statistical analysis, employers should consider the other programmes and initiatives it has in place across the business to support the progression of female employees. It should consider whether more can and should be done in this area, and draw these points together for inclusion in its narrative to the report.
5. As reports are prepared over the next 12 months, a senior executive should be briefed on the requirements, as they will be required to confirm the accuracy of the figures.
In the run up to publication of the report, consideration should also be given to an internal communications plan (and an external one, if you have a particularly positive message to tell!).