Should smaller employers publish gender pay gap figures?
The Business, Energy and Industrial Strategy (BEIS) Committee has published a report on gender pay gap reporting, which finds that in some organisations the pay gap is more than 40%, although the median is around 18% nationally in favour of men. 78% of organisations have reported gender pay gaps in favour of men.
Currently, employers with 250 or more employees have to publish their gender pay gap figures annually. The gender pay gap measures the difference between male and female average hourly pay and the difference between male and female average bonus pay. The information must be published on the employer’s website and on a Government website. The first annual figures had to be published by 4 April this year, and the Government Equalities Office has confirmed that all 10,000 employers in scope of the reporting obligations have published their figures.
The report makes a number of recommendations for strengthening gender pay gap reporting and for closing the pay gap. These include:
- Reporting obligations to extend to all organisations with 50 or more employees from 2020
- A requirement for organisations to publish, alongside the figures, an explanation for any pay gap, and an action plan for closing the gap against which they must report progress each year
- The regulations on gender pay reporting to be amended so that partner remuneration is included in the figures
- The regulations on gender pay reporting to be amended so that the current requirement to report on salary quartiles should be changed to deciles
- The government to clarify current areas of ambiguity, for example on how bonus figures should be calculated, and provide clear guidance dealing on the method of calculation
- The government to end the legal uncertainty surrounding the Equalities and Human Rights Commission’s enforcement powers by providing for specified fines for non-compliance
Meanwhile, the Government Equalities Office has published recommended actions for employers that are likely to reduce the gender pay gap based on approaches that have been shown to work. It aims to help employers create more effective action plans. The recommendations include:
- Including multiple women in shortlists for recruitment and promotions
- Using skill-based assessment tasks in recruitment
- Using structured interviews for recruitment and promotions
- Encouraging salary negotiation by showing salary ranges
- Introducing transparency to promotion, pay and reward processes; and
- Appointing diversity managers and/or diversity task forces
The Committee’s stated aim is that “increased transparency should, over time, improve fairness”. Rachel Reeves MP, Chair of the Business, Energy and Industrial Strategy Committee commented: “The gender pay gap must be closed, not only in the interests of fairness and promoting diversity at the highest levels of our business community, but also to improve the country’s economic performance and end a monstrous injustice.”
For the moment, there is no change, but all employers should keep a careful watch on this issue and be aware of the possibility of new or increased obligations on the horizon.
18 September 2018
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