The Gender Pay gap – no surprise

The first Gender Pay Gap reporting period closed at midnight on 4th April 2018. As the deadline closed, with over half those submitting>employment lawyers were expecting to be surprised by the results – anticipating that they would reveal what individual equal pay claims and news stories such as the scandal of the BBC’s own gender pay gap have long suggested. So what exactly does the first set of information provided under the Gender Pay Gap reporting requirements tell us?

Some people remain confused about what the Gender Pay Gap reporting requirements are. Essentially, all employers with 250 or more employees based in the UK are required to submit detailed information about the differences between men’s earning and women’s earnings, expressed relative to men’s earnings – e.g. women earn 17% less than men. It’s not just salaries – bonuses are also included.

Businesses who are required to provide this information must be registered with the gender pay gap reporting service and must report the data they collect to the government, using the tool. Businesses must also publish the data along with a written statement on a publicly-facing website.

For any UK Employment lawyer, the extent of the discrepancies between men and women when it comes to pay may be no surprise, but the statistics are nevertheless shocking.

78% of companies pay men more than women. Only 8 companies reported no pay gap at all, and 14% reported that they paid women more than men.

Only 1 in 3 businesses have a majority of women in their top earning roles. For most businesses, women make up a far higher proportion of those in lower paid roles than men. What’s more, the further up the pay scale you go, the fewer women are found there.

The gender pay gap reporting requirement doesn’t just extend to salary. As mentioned, it covers bonuses too. Although the finance sector has the biggest gap between men and women when it comes to bonuses – 35%, Russell Group universities and the NHS also reported big gaps between the amount of bonuses received by men and women.

The gender pay gap>Employment Tribunals. Equal Pay claims are notoriously difficult to win, and despite high profile litigation for example that in the ASDA case, many cases never see the light of day.

The statistics are also incomplete in terms of providing a national snapshot of the gender pay gap in respect of these large employers. 1,557 businesses are currently being investigated by the Equality and Human Rights Commission for failing to file their data as required. The missing statistics are unlikely to have a huge impact on the overall results but is significant.

Those that are found to have failed to comply with the reporting requirements can face an unlimited fine, although many commentators say that powers of the EHRC don’t go far enough. The chief executive of the Fawcett Society, Sam Smethers, has been among many to advocate giving civil enforcement powers similar to those of HMRC, to the EHRC. There is also the possibility of public ‘naming and shaming’ for those organisations that have not complied with the reporting requirements. Because firms have to publish the data on their websites, it will be easy to identify those that have not complied.

A question that has been asked by many of the best employment lawyers in London, there’s no easy answer to the problem of the gender pay gap. The Guardian analysed the figures that came from the reported statistics and noticed that in businesses where women were more fairly represented, or even over-represented at the higher levels, the median pay gap in that organisation tended to be reduced. Whether that is a cause of the reduced gender pay gap in those organisations, or the effect, an indication of a more balanced culture where women are treated equally to men overall, is not clear.

Although having a fairer balance at boardroom level may impact positively to drive a reduction in a business’s gender pay gap, achieving that is potentially a long way off as many women still struggle to be treated as equals in the workplace. For those committed to addressing this, it’s worth talking to top employment law firms in London to find out about the kind of training and pro-active steps to take.