It's not that long ago since a number of BBC news presenters (and other high profile organisations and individuals) were thrown into the spotlight over the gender pay gap. We have since seen reports of high profile individuals such as John Humphrys and Jeremy Vine taking voluntary pay cuts. It is clear that gender pay gap reporting raises dramatic headlines and even more serious questions!
The UK has one of the highest gender pay gaps across Europe and it is still making the headlines. Just last month, I saw reports in the press on steps being taken by the BBC to reduce their gender pay gap and about other businesses which have gender pay gaps to address. It is undoubtedly a sensitive issue.
Earlier this month, the government department of BEIS published its report on employer compliance in this area and made a number of recommendations. Read on for more details !
Gender Pay Gap - what it is and why employers need to know about it!
As a recap, the gender pay gap refers to the difference in average payment between men and women. Last year, we saw new legislation being brought in to require companies with more than 250 employees to publish their gender pay statistics on an annual basis. That legislation had the (not so creative) name of The Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 or "the Regs" as I will now call it.
The Regs confirm how the gender pay gap should be calculated by employers and set out other requirements for employers to meet. For example, employers must publish their gender pay gap information on their own website and must retain the information online for three years. Whilst some businesses have complied with these steps, further recommendations have now been made to try to improve compliance and effectiveness in this area.
The latest BEIS report and recommendations
Earlier this month, the Department for Business, Energy and Industrial Strategy (known as BEIS) released a report discussing employer compliance with the Regs.
The report raises a number of concerns, including for example:
- some businesses found the process of producing figures challenging and required assistance from external organisations to meet the legal requirements;
- there is some confusion over who to include in the workforce and concern over the impact of exclusions. For example, should non-executive directors be included? If partners in LLPs are excluded, then this potentially distorts the scale and understanding of the gender pay gap issue;
- there is no requirement for employers to include an accompanying narrative to put the statistics in context or explain actions that will be taken;
- there is a lack of effective sanctions for businesses that fail to comply with the reporting requirements at present; and
- there needs to be more clarity in the guidance accompanying the Regulations to help employers.
Where will it go from here?
I am aware that, for many employers, the guidance does not go far enough in answering unresolved questions or uncertainties for employers. The means of reporting needs to be clear to employers so the gender pay gap can be reported accurately and appropriate steps can be taken to address it.
More guidance would assist businesses and the hope is that updated guidance will follow, particularly given the recommendations from BEIS. In the meantime, the requirements of the Regs still have to be met and Brabners is happy to assist.
The UK has one of the highest gender pay gaps in Europe and pay reporting can only be the first step in closing it, says the Business, Energy and Industrial Strategy Committee in their Report on 'Gender pay gap reporting'.