Following the submission of the 2019 gender pay gap data in April, fewer than half the UK’s biggest employers have succeeded in narrowing their gender pay gap.
Overall, 78% of companies had a pay gap in favour of men, 14% favoured women and the rest reported no difference. Firms had until 4 April to file pay comparison data or face legal action.
It became compulsory under 2017 Regulations that all organisations listed in schedule 2 of the regulations that employ over 250 employees are required to report annually on their gender pay gap. This obligation is for both public bodies and private companies.
How is the Gender Pay Gap calculated in the UK?
The mean pay gap is the difference between a company’s total wage spend-per-woman and its total spend-per-man. The number is calculated by taking the total wage bill for each and dividing it by the number of men and women employed by the organisation.
What is the purpose of Gender Pay Gap data?
The gender pay gap is a high-level snap shot of pay within an organisation and shows the difference in the average pay between all men and women in a workforce. If a workforce has a particularly large gender pay gap, this can indicate there may be a number of issues to deal with, and the individual calculations may help to identify what those issues are.
The gender pay gap is different to equal pay. Equal pay deals with the pay differences between men and women who carry out the same jobs, similar jobs or work of equal value. A gender pay gap does not equate to the existence of an equal pay problem, but a gender pay gap may be a trigger for further investigation about the reasons why the gap exists.
Closing the Gender Pay Gap
The steps many businesses have been encouraged to focus on, to close the Gender Pay Gap since 2017 reporting has included the following actions:
- Strengthening the female pipeline – by holding focus groups and issuing staff questionnaires to understand what the key blockers to promotion are;
- Sharing best practice – share ideas on closing gender pay gaps;
- Recruiting more apprentices and graduates – developing routes into the business for apprentices and graduates to increase the number of employees at these grades who want to develop their career;
- Controls on starting pay – considering central controls on starting pay, particularly at more senior grades to ensure that all men and women start on the pay band minimum unless a high salary is authorised centrally;
- Strategic workforce plan – ensuring that the Gender Pay Gap is taken into consideration when reviewing the business’ strategic workforce plan and locations strategy.
Comparing the 2019 Gender Pay Gap data with last year’s results
- Unsurprisingly, no significant changes have been noted. Despite varying reports on the changes made over the last few years, what is clear is that the median pay gap has only narrowed by a fraction of a percentage. The BBC suggests that compared with the last year the median pay gap has narrowed by just 0.1%, reduced from 9.7% to 9.6%. (BBC)
- The figures show that around 8 out of 10 companies pay men more than women. The BBC has reported that overall, 78% of companies had a pay gap in favour of men, 14% favoured women and the rest reported no difference.
- There was little progress in the proportion of women in top paid jobs. In 2017, women accounted for 37% of the top quartile of earners. This figure increased to only 38% in 2018.
- Disappointingly, in certain sectors such as finance and insurance, health and social work and the public sector the pay gap has widened.
These figures show that the pay gap will not be eliminated overnight and more needs to be done to tackle the problem. It was also noted that a number of employers have failed to report their gender pay gaps timely and many have filed mathematically impossible results.
The Regulations themselves do not include an enforcement mechanism or any sanctions for non-compliance. However, the Equality and Human Rights Commission (EHRC) is responsible for monitoring compliance with the Regulations and has the power to seek a court order against the organisations that refuse to comply with their reporting duty.
In the meantime, the EHRC has confirmed that it will take enforcement action against the businesses that missed the 5 April 2019 deadline. No company has yet to face a fine for not reporting. However, it seems likely that in future sanctions may become one of the main means of policing the lack of reporting/misreporting the figures. The other option, which is becoming increasingly popular, is to name and shame the worst offenders for failure to comply with their reporting duties.
If you would like advice on your company’s pay and benefit strategies, please get in touch with our HR Consultants on 01271 859 267 or firstname.lastname@example.org