Mind the Gender Pay Gap

Gender pay gap reporting is an important exercise for eligible employers and should be given careful consideration. If approached positively, the gender pay gap report can be an excellent tool to showcase a company, enhance their commercial reputation, and enable management to make improvements where needed. In this article we address several of the most frequently asked Gender Pay Gap Reporting questions.

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When was gender pay gap reporting introduced?

Changes to Section 78 of the Equality Act which came into force on 6 April 2017 made it compulsory for UK companies with more than 250 employees to publish gender pay gap figures at the end of every financial year (excluding Northern Ireland).

What is gender pay gap reporting?

Defined as the difference between the average earnings of men and women, expressed relative to men’s earnings, the regulations cover approximately 9,000 employers and nearly half of the UK’s workforce. According to the UK Government, the purpose of the initiative is to help employers identify the areas in their organisation which are subject to gender pay disparity, and use this data to eliminate the gap, creating a more modern workforce, and ensuring that women have the same opportunities to fulfil their potential in the workplace as men.

How big is the gender pay gap in the uk?

When the legislation was first introduced, the UK gender pay gap among all employees stood at 18.1%; ONS figures for 2019 shows that this has now reduced to 17.3% and is continuing to decline. Furthermore, for age groups under 40 years, the gap for full-time employees is close to zero.

Who has to report gender pay gap?

All UK organisations with more than 250 employees at the ‘snapshot date’ must comply with the gender pay gap regulations.  In the case of the Equality Act and pay gap reporting, a broader definition is applied to the term ‘employee’, with workers (those with a contract to do work or provide services), and some self-employed (where the work is personally performed by an individual) included within the headcount.  Where an employee works part time, they are counted as one employee; similarly, where more than one employee contributes towards a job-share arrangement, they are each counted separately as employees.  Full time equivalency is not relevant to gender pay gap reporting.

When is the gender pay gap deadline?

Gender pay gap figures must be calculated using a specific reference date – this is called the ‘snapshot date’. The snapshot date for public sector organisations is 31st March, and for businesses and charities it is 5th April. Organisations must publish their findings annually and within a year of the snapshot date.

Where to publish gender pay gap reports

All data collated as part of gender pay gap reporting regulations must be published to a place on the organisation’s public-facing website where the information can be reasonably expected to be found, and should remain online for a minimum of 3 years.  It should also be submitted to UK Government.

What employee payments are included in the gender pay gap calculations?

The elements of pay to be included in the gender pay gap reporting calculations include: basic pay,allowances, piecework pay and pay for leave.

They should not include: overtime payments, redundancy payments, pay in lieu of annual leave, benefits in kind (cash equivalents), securities, interest free loans and any amounts involved in salary sacrifice schemes.

All figures used in the calculations should be taken at source before deductions.

Is it the same as equal pay reporting?

Gender pay gap reporting looks at the difference in gender pay across an entire organisation.  This is different to equal pay reporting, which deals with the pay differences between men and women who carry out the same jobs, similar jobs, or work of equal value.  The Equal Pay Act 1970 prohibited employers from paying women less than men for the same job.  However, while unequal pay is illegal, the gender pay gap – the percentage difference between the average hourly earnings for men and women – persists.  Gender pay gap reporting is designed to address this disparity.

What happens when companies refuse or fail to report?

The Equality and Human Rights Commission (EHRC) is responsible for enforcing gender pay gap rules and publicly names those organisations that have failed to publish a gender pay gap report by the due date.  In the future, financial penalties may be imposed on companies who fail to meet their obligations.

Will smaller organisations be expected to submit gender pay gap reporting?

In August 2018, the parliamentary Business, Energy, and Industry Strategy (BEIS) committee called for gender pay gap reporting to be expanded to include all companies with 50+ employees. To date, the committee’s recommendations have not been implemented, although around 300 smaller companies who do not yet meet the mandatory criteria have voluntarily submitted gender pay gap data.

Where can I view gender pay gap report data from other organisations?

Gender pay gap reporting data submitted by all organisations can be found on the UK Government website.

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