Following recent news stories involving the comparative remuneration of BBC presenters, the gender pay gap has once again come to the forefront of the public’s attention. With the introduction of new legislation in the form of the Gender Pay Gap Information Regulations 2017 last year, it is vital that business owners are also paying attention to the issue, ahead of April 2018.
What is the Gender Pay Gap
The gender pay gap is the difference between the average hourly earnings of women and men, not just those working in comparable roles, but within an organisation as a whole. Workplace culture and environment can have a significant impact on the size of the gap, although the picture is somewhat skewed by the life and work choices made by men and women.
One of the main reasons for the gap is that a greater proportion of women choose to work in less financially rewarding occupations such as administration, teaching, and caring professions, whilst men are more likely to opt for professions such as engineering, software development, sales, and finance, which entail higher rates of remuneration.
The gender pay gap is particularly evident within the age range that women typically begin to have children. Shared Parental Leave was introduced in 2015, allowing parents to share maternity leave and pay, however, uptake has been limited, and women still take far more leave than men to care for children. Women are also more likely to juggle work with childcare, returning to work in a part-time capacity, a contributing factor to the under-representation of women in managerial and senior roles.
Reporting Obligations for Employers
In an effort to address the gender pay gap, the Government requires all large employers, (defined as having a headcount of 250 employees or more as of 5 April 2018) to calculate, and publish their gender pay and bonus gap.
Employers who are caught by the Gender Pay Gap Information Regulations will need to gather the required information in order to make six basic calculations:
- Mean gender pay gap
- Median gender pay gap
- Mean bonus gender pay gap
- Median bonus gender pay gap
- Proportion of males and females receiving a bonus payment
- Proportion of males and females in each quartile band
They will also need to provide a written statement signed by a director or appropriate senior person, confirming the accuracy of the calculations, along with an explanation for the gap, and a plan to address it. The information should then be published on the company website, and on the designated government website. The calculations will need to be published every year so long as the Company employs at least 250 employees.
Addressing the Gender Pay Gap
The new regulations require companies to describe how they intend to bridge the gap, and this, more than the data itself, will be of primary importance in the eyes of stakeholders. Businesses should be prepared to take full advantage of the opportunity to provide a narrative and promote their success in narrowing the gap.
In looking to address the gap, employers would be advised firstly, to adjust inequitable salaries. Other measures should also be taken, such as reviewing family-friendly policies and considering how these could be expanded upon beyond the minimum legal requirement. They could also look to explore measures such as adopting agile working, and encouraging a positive mentality towards flexible working, to enable women to return to work after maternity, and continue to progress their careers.
In sectors which are traditionally dominated by men, steps should be taken to attract and retain women, and remove any unconscious bias from the recruitment process. Employers could also consider whether senior roles could be filled on a part-time or job share basis to increase the representation of women in the upper pay quartiles.
Whilst failure to meet reporting obligations may result in measures being taken against employers, failure to actually narrow the gap will not entail any official sanctions. However, there are other reasons that businesses should be concerned about the size of their gap, and small companies who are not required to report should also take this opportunity to review pay parity between male and female employees. By reducing the disparity, employers will improve their public image, increasing value in the eyes of stakeholders, and reduce the risk of liability for equal pay claims. Furthermore, a more equal workforce often translates into a more motivated and productive workforce, and a more profitable business.