The gender pay gap: a look at the statistics and next steps for employers and employees
By Teni Shahiean, CEO at OTS Solicitors
From the news last week, London employment law solicitors learnt that last year the gender pay gap at Transport for London grew to 21.5 per cent. That is a reported increase of 1.8 per cent from the previous year.
That is not great headline news for Sadiq Khan who chairs TFL. Perhaps we should all look to Iceland for the answer on what to do about the gender pay gap.
In January 2018, Iceland implemented new legislation to enforce equal pay between genders. Under the legislation, firms that employ more than 25 people have to obtain a government certificate demonstrating pay equality. If they do not do so, they can face fines.
The World Economic Forum has ranked Iceland the best in the world for gender equality for nine years in a row.
Where does London and the UK go from here? According to reports, City Hall blame the gender pay gap at TFL on the fact that there are fewer women, than men, employed in senior roles at TFL.
The best London employment law solicitors say that if women were paid less for doing the same job then they would have an employment law claim. The position is more complex with the gender pay gap.
TFL is not alone in attributing the gender pay gap to lack of women in senior roles. Last year, one piece of research revealed there were more people called David leading FTSE 100 companies than there were women.
As the Managing Partner and co-founder of a Legal 500 ranked law firm, I was interested to learn there were seven female chief executives and nine male chief executives named David of FTSE 100 companies.
What advice can top London employment law solicitors give to address the gender pay gap? Flippantly you could say: call your daughter “David”, but that does not address the daily struggle to address the gender pay gap in London and across the UK.
How can OTS Solicitors help?
OTS Solicitors provides specialist personalised employment law advice to large and small employers and to individuals ranging from senior executives to apprentices.
For advice on any aspect of employment law, please call us on 0203 959 9123 to arrange an appointment to speak to one of our experienced London employment law solicitors.
The 2018 UK gender pay gap figures
In April 2018, the requirement to provide gender pay gap statistics revealed that nearly eight in ten employer companies and public sector bodies paid males more than females.
A call to action
According to reports, the legislation requiring companies to reveal their gender pay gap statistics in 2018 has had an impact. However, employers are facing pressure to narrow the gender pay gap in 2019.
A report from the Confederation of British Industry (CBI) reveals that the number of businesses saying they are taking action to close the gender pay gap is up 30% from the 2017 figures. In the opinion of the best London employment law solicitors the legislation requiring companies to reveal gender pay gap statistics and the #metoo movement has moved attitudes a long way in 12 months.
Employers are also recognising the advantages to business in recognising the gender pay gap and taking action, such as:
• A diverse workforce helps recruit staff;
• No glass ceiling helps retain staff;
• Increased skills in the workforce.
However, the top London employment law solicitors recognise there is a long way to go. To put the gender pay gap into context, the World Economic Forum has said that the gender pay gap will take 170 years to close.
The gender pay gap – the law
In 2018, the government implemented the gender pay gap reporting requirements requiring all employers with 250 or more employees based in the UK to submit detailed information about employee earnings.
The gender pay gap information has to be expressed relative to males’ earnings. That is why you see percentage figures bandied around.
In essence, the gender pay gap rules say:
• Businesses who are required to provide gender pay gap information must be registered with the gender pay gap reporting service;
• The business must report the data they collect to the gender pay gap reporting service;
• The salary data must include income bonuses;
• The business must publish the gender pay information with a written statement on a public website.
The next set of gender pay gap figures are due to be published by April 2019. Those statistics are likely to be closely monitored to see how much movement there is in the gender pay gap.
Penalties for not providing gender pay gap information
Top London employment law solicitors advise that if an employer does not comply with the gender pay gap-reporting requirements the business can face an unlimited fine.
There have also been calls for additional powers to enforce reporting requirements. This is because over 1,500 companies failed to provide the data in 2018.
Some trade union organisations have called for the public ‘naming and shaming’ of employers who do not comply with the law. This, in the opinion of the best London employment law solicitors, may be the best incentive for employers to comply with the reporting requirements. That is because the adverse publicity could create reputational damage to some high profile employers and be damaging to firms trying to recruit the best talent in a time of low unEmployment and concerns about the future availability of migrant workers after Brexit and changes in Immigration policy.
Next steps for employers
Employers with over 250 UK based staff must report information to the gender pay gap service by April 2019.
The information also needs to be published on a public website.
If an employer does not have procedures in place to collate the gender pay gap data, there is still time to get human resource managers to start to put systems in place. Bespoke training services are available to help organisations understand the rules and the penalties of non-compliance.
Next steps for employees
So far, the gender pay gap information has revealed that men tend to be in higher-ranking job roles than women. It is not normally a case of women being paid less for doing the same job as a man. If it were, then that would be illegal under the Equalities Act 2010.
The data on gender pay does not create a charter to launch discrimination claims, as it is difficult to use the raw information to support an equal pay claim. In an equal pay claim, a woman has to show that she is paid less than a man for doing work of the same or of similar value.
What the information on the gender pay gap does provide is some data to look at whether gender discrimination has taken place in either the recruitment or the promotion process.
Demographics, diversity and the gender pay gap
Many organisations blame the gender pay gap on lack of females in the boardroom and at senior levels within a company or public body.
For example, figures show women working in the Department for Transport are paid almost 17 per cent less than their male colleagues are. These statistics do not to paint the whole picture, with the majority of middle ranking to senior roles being filled by men, as females do not apply for the roles. That then leads to a wider debate about our UK education system and the need to empower both male and female pupils to study the sciences and to work in industry.
However, although many organisations are working on recruiting more women at all levels in business, it was rarer to find companies placing a greater focus on gender diversity in business leadership.
The best London employment law solicitors anticipate that the gender pay gap will remain an issue whilst the top income earners and business leaders are predominately male. That is because male dominance at the top of the salary tree skews the figures.
If employers are committed to addressing the gender pay gap top London employment law solicitors can work with them to provide training services on diversity in the workplace and the steps that employers can take to address gender pay gap in their companies without creating bad feeling or Employment Tribunal claims by male colleagues.
Is Iceland equal pay legislation the way forward?
Top London employment law solicitors urge caution and research before adopting the Iceland model legislation. In October 2018, protests were made about the legislation still not preventing “wage theft” and women’s work still not being evaluated and paid for fairly.
In any event, the best London employment law solicitors anticipate that employers’ attention will be focussed on their Brexit strategy in the coming months. Employers do however have to remember the April 2019 gender pay gap data deadline.
How can OTS Solicitors help?
Whether you are an employer or an employee, you may need advice on the Equality Act and related grievance and discrimination issues and Employment Tribunal claims.
If you are an employer, OTS Solicitors provide bespoke training services addressing areas such as the gender pay gap or recognising discrimination and acknowledging diversity in the workplace. Our training services are an effective means of proactively keeping up with changes in employment law and reducing the risks of grievances escalating into Employment Tribunal claims.
For advice on any aspect of employment law please call us on 0203 959 9123 to arrange an appointment to speak to one of our experienced London employment law solicitors.