What is the gender pay gap?
The gender pay gap has long been an issue in the UK and many other countries worldwide. It refers to the difference in average pay between men and women in the same jobs or occupations. In recent years, the UK government has taken steps to address this issue through mandatory gender pay gap reporting.
What is gender pay gap reporting?
Gender pay gap reporting is a legal requirement in the UK for large employers to publish data on the difference in average pay between male and female employees. This requirement was introduced in 2017 as part of the UK government’s efforts to address the gender pay gap.
Under the regulations, employers with 250 or more employees are required to report their gender pay gap data, including the median and mean hourly pay gap, the median and mean bonus pay gap, the proportion of male and female employees receiving bonuses, and the proportion of male and female employees in each quartile of the organisation’s pay distribution.
The aim of gender pay gap reporting is to increase transparency and accountability around the issue of the gender pay gap and to encourage employers to take action to address any disparities. By publishing their gender pay gap data, employers are able to identify any areas where they may have gender pay gaps and take steps to address them. By shining a light on the issue of gender pay inequality, it was hoped that companies would be more likely to take steps to address it. Gender pay gap reporting is part of a wider effort to promote gender equality in the workplace and create equal opportunities for men and women.
What organisations are required to publish a gender pay gap report?
In the UK, gender pay gap reporting is a legal requirement for all employers with 250 or more employees. This includes all private and public sector organisations, including charities and voluntary organisations.
Employers are required to report on the difference in average pay between male and female employees, including the median and mean hourly pay gap, the median and mean bonus pay gap, the proportion of male and female employees receiving bonuses, and the proportion of male and female employees in each quartile of the organisation’s pay distribution.
Smaller employers with fewer than 250 employees are not legally required to report their gender pay gap data, but they can do so voluntarily. Some smaller employers may also be required to report their gender pay gap data if they are part of a larger group of companies that collectively employ 250 or more employees.
What information needs to be reported?
In the UK, employers with 250 or more employees must provide the following information for gender pay gap reporting.
- The mean gender pay gap: The difference between the average hourly pay of male and female employees across the organisation.
- The median gender pay gap: The difference between male and female employees’ middle hourly pay rates across the organisation.
- The mean bonus gender pay gap: The difference between male and female employees’ average bonus pay across the organisation.
- The median bonus gender pay gap: This is the difference between male and female employees’ middle bonus pay across the organisation.
- The proportion of male and female employees receiving a bonus (the percentage of male and female employees who receive a bonus payment).
- The proportion of male and female employees in each quartile of the organisation’s pay distribution (the percentage of male and female employees in the lowest, lower, upper, and highest quartiles of the organisation’s pay distribution).
How to publish a gender pay gap report
Employers must publish their gender pay gap report on their own website and on the government website, which is called the Gender Pay Gap Reporting Service and is managed by the government’s Equality and Human Rights Commission (EHRC).
To publish your gender pay gap report on the government website, register your organisation and create an account on the Gender Pay Gap Reporting Service. Once registered, you can enter your gender pay gap data and upload your report.
In addition to publishing your report on the government website, you should also publish it on your own website. This will ensure that your employees, customers, and other stakeholders are able to access the information easily.
When publishing your report on your website, it is important to ensure it is easily accessible and prominently displayed.
Employers are also encouraged to publish an action plan alongside their gender pay gap report, outlining the steps they are taking to address any gender pay gaps identified. This is an opportunity for organisations to demonstrate their commitment to gender equality and to promote a more inclusive and diverse workplace.
When do employers need to publish their gender pay gap report?
Employers must publish their gender pay gap data on a specific date each year, which is called the ‘snapshot date’. The snapshot dates are:
- 31 March for most public authority employers
- 5 April for private, voluntary and all other public authority employers
You should base your gender pay gap calculations on payroll data taken on your snapshot date.
The reporting deadlines are:
- 30 March for most public authority employers
- 4 April for private, voluntary and all other public authority employers
Gender pay gap data must be reported and published within a year of your snapshot date.
As long as you have 250 employees on your snapshot date, you are required to publish your gender pay gap information each year on or before the reporting deadline.
How are the reporting obligations enforced?
The Equality and Human Rights Commission (EHRC) enforces gender pay gap reporting obligations. The EHRC can investigate and take enforcement action against employers who fail to comply with their reporting obligations.
If an employer fails to publish their gender pay gap report or the data is inaccurate or incomplete, the EHRC may issue an enforcement notice requiring the employer to comply with their reporting obligations. Failure to comply with an enforcement notice can result in fines and other penalties.
In addition, the EHRC may also conduct investigations into employers who have published gender pay gap reports that raise concerns or indicate potential breaches of the law. If an investigation identifies any breaches of the law, the EHRC may take enforcement action, which can include legal proceedings and fines.
Employers who fail to comply with their gender pay gap reporting obligations may also face reputational damage and negative publicity, which can significantly impact their brand and their ability to attract and retain employees.
What is HR’s role in gender pay gap reporting?
If you have an internal HR/people team, they will usually play a crucial role in gender pay gap reporting. The people team is often responsible for collecting and analysing the data needed for the report, ensuring that the report is accurate and complete, and submitting the report to the appropriate authorities.
HR is also responsible for developing and implementing strategies to address any gender pay gaps identified in the report. This may include reviewing and revising pay and bonus structures, implementing training and development programs to support the career progression of women in the organisation, and promoting flexible working arrangements that enable employees to balance work and caring responsibilities.
In addition, your people team can play a key role in communicating the results of the gender pay gap report to employees and other stakeholders and engaging with employees and representatives to develop and implement strategies to address any disparities.
Overall, HR’s role in gender pay gap reporting is to ensure your organisation complies with the legal requirements, to identify and address any disparities in pay between male and female employees, and to promote a culture of equality and diversity within the business.
If you don’t have an in-house people team and would like support with your gender pay gap reporting or reducing your gender pay gap, please get in touch with us to discuss how we can help.
Steps you can take to reduce your gender pay gap (if you have one)
You can take several steps to reduce the gender pay gap.
- Conduct a pay audit to identify gender pay gaps within the organisation. This involves reviewing the pay and bonus structures to identify disparities between male and female employees.
- Review job descriptions and adverts to ensure they are free from gender bias and based on objective criteria such as skills, experience, and qualifications. Try Total Jobs’s gender decoder to see how your adverts may have some gender bias.
- Encourage flexible working arrangements such as part-time work, job-sharing, and remote working to enable employees to balance work and caring responsibilities.
- Provide training and development opportunities to support women’s career progression within the organisation.
- Promote diversity and inclusion within your organisation by developing policies and practices that support diversity and inclusion and by fostering a culture that values diversity and recognises the contributions of all employees.
- Set targets and monitor progress to reduce the gender pay gap and monitor progress towards these targets. This can help to ensure that efforts to reduce the gender pay gap are effective and sustainable.
Overall, reducing the gender pay gap requires a sustained and coordinated effort by employers, employees, and other stakeholders. By taking these steps, you can help to promote gender equality and create a more inclusive and diverse workplace.
How successful has the gender pay gap legislation been?
While progress has been made in reducing the gender pay gap in the UK since gender pay gap reporting was introduced, the gap has not yet been closed. According to data from the UK government, the median gender pay gap for full-time employees was 7.4% in 2020, down from 9.0% in 2017, when gender pay gap reporting was first introduced.
While this is a positive trend, there is still a long way to go to achieve gender pay parity. The gender pay gap varies by industry and occupation, with some sectors and roles having much larger gaps than others. For example, the gender pay gap is particularly large in the finance and insurance sector, where the median gap is 23.3%.
It’s worth noting that gender pay gap reporting has helped raise awareness of the issue and encouraged many employers to address it. However, reporting alone is not enough to close the gender pay gap. It requires a concerted effort from employers, policymakers, and society to address the underlying causes of the gap and create more equal opportunities for all.
If you have any questions about gender pay gap reporting, please do contact our team. We’d love to hear from you.
New pay gap reporting requirements expected
Employers are likely to see new pay gap reporting obligations as part of the government’s anticipated Equality (Race and Disability) Bill. This draft bill proposes a mandatory requirement for organisations with 250 or more employees to publish their ethnicity and disability pay gaps. The goal is to increase transparency around pay disparities, similar to gender pay gap reporting, and to encourage businesses to take proactive steps in addressing these inequalities.
However, reporting on ethnicity and disability pay gaps introduces additional complexities. Ethnicity pay gap reporting will require organisations to consider the different outcomes for various ethnic groups, which is often complicated by incomplete or inconsistent data on employee ethnicity. Similarly, disability pay gap reporting will rely on employees self-identifying as disabled, posing challenges in obtaining comprehensive data and reflecting the diverse nature of disabilities.
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