Even though the gender pay gap has significantly lowered over the last 20 years, businesses still have a long way to go in regards to pay equality.
According to the Fawcett Society, the gender pay gap for full-time workers currently stands at 13.9 per cent in the UK, and at the current rate of progress, it will take over 50 years to close the gap.
To help combat this, from April 2017, all businesses with over 250 staff members will be required to publish specific information about the differences in pay between genders, under The Equality Act 2010 (Gender Pay Gap Information) Regulations 2017. The aim of the Act is to help close the gender pay gap and to encourage transparency from UK businesses.
We’ve taken a look at how to prepare your business for gender pay gap reporting, detailing what figures you need to make public, and how it will may affect your business in the long run.
What businesses are required to publish information?
The legislation requires any business with over 250 employees to publish gender pay gap data. The 250 employees only include “relevant” people employed by the business, which means all staff members with direct contracts of employment.
What information needs to be published?
All employers with over 250 relevant employees are required to report
- Average gender pay gap as a mean average
- Average gender pay gap as a median average
- Average bonus gender pay gap as a mean average
- Average bonus gender pay gap as a median average
- Proportion of males receiving a bonus payment and proportion of females receiving a bonus payment
This data must be published on the employer’s website for at least three years, alongside being published on a designated government website.
How should this information be reported?
As an employer, you need to plan how you will present the data. The legislation requires businesses to publish just the data without any additional commentary, so it’s your choice whether to explain or describe the results. How your business chooses to report the figures can have a large impact on how they are interpreted by the press, the public and your staff members.
If your results may be controversial, it’s worth taking the time to report on more than just the data itself. You can use this as an opportunity to outline the context behind the data, such as why some employees may have earned more than others.
It’s also a great opportunity to highlight any successes. For example, if a company policy changed in the last decade has made a difference in the pay divide, shout about it in the report.
If your results are negative, the most important thing to do is to make it clear that your company is going to address this and make changes to increase pay equality. You should also pre-plan a response and advise staff members before the information is released publicly.
How will gender pay gap reporting affect your business?
No matter what your data uncovers, the legislation has not been introduced so the government can bring any legal actions against a company that has a clear pay divide. There will be no direct financial consequences for companies with extensive pay gaps, however they may be subject to media criticism and consumers. More importantly however, it may impact on employee staff moral and recruitment.
If your company’s data reveals a large difference in the pay between men and women, you can take the legislation change as a chance to address the issue.
Numerous reports have shown that gender diversity throughout an organisation improves business performance. In a highly competitive market for skilled employees, the most talented and best individuals will be looking for progressive and diverse organisations, so for the sake of your company’s future, it’s well worth starting the journey towards gender pay equality as soon as possible.
Further info:
To find out more about how the gender pay gap legislation will affect your business, and the steps you need to take in April, watch berg’s webinar on Gender Pay Gap reporting, which covers the following:
- What the regulations will be and how they will impact your business
- How to prepare for the regulations
- How to interpret and apply the regulations
- How to protect against claims and manage risks
This post has been written by berg, a law firm that works closely with companies to navigate the potentially tricky post-gender pay gap reporting period. Check out their Gender Pay Gap Reporting Guide here.
