Organisations that employ 250 or more workers will be obliged to publish reports showing the pay gap which statistically exists between their male and female employees. The first reports have to be published by April 2018.
The Government has released data on the first 527 organisations to publish their reports. The BBC’s China Editor, Carrie Gracie, resigned the following day citing pay inequalities with male colleagues.
What does gender pay reporting mean for businesses and what issues does it throw up?
The statistics released by the Government on the first 527 firms to publish their gender pay reports show some interesting results. According to the data, 80% of the organisations paid women less per hour on average than men. Of particular note was high-street fashion store Phase Eight, which paid men nearly 65% more per hour and budget airline EasyJet, which paid men nearly 53% more per hour. Nearly half of the organisations who have published data paid men at least 10% more than they paid women per hour.
At the other end of the scale, organisations such as the Armed Forces and the British Museum published data showing no pay gap.
As thousands more organisations publish their own data in the coming months it will be fascinating to see how the figures stack up.
BBC China Editor
News broke on 8 January 2018 that Carrie Gracie, the BBC China Editor who had worked for the BBC for over 30 years, had resigned. Ms Gracie quit her international editor post and accused the BBC of gender pay discrimination.
In an open letter Ms Gracie accused the BBC of having a secretive and illegal pay culture. She went on to say that licence-fee payers had the right to know that the organisation was breaking equal pay laws and resisting the pressure for a fair and transparent pay structure. She compared herself to male counterparts whom she claimed were better paid than herself.
What does the law say?
Periodic updates by well-known organisations can be expected to continue on an annual basis as a result of the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017. There is no tangible penalty for firms who fail to comply with the requirement to publish reports but failing to do so could draw negative attention and lead to inquisitive employees questioning why it hasn’t been published. Like all statistics, the method for capturing the data doesn’t really present a 100% accurate picture. Some reports will therefore make employers look worse than they are in reality and vice versa.
The law regarding equal pay is set out in the Equality Act 2010 and, in broad terms, requires that men and women must be paid the same amount where they do the same job, work which has been rated as equivalent or work of equal value. Employers can defend equal pay claims if they can show that a material factor is the cause of the difference and relying on that factor was a proportionate means of achieving a legitimate aim. Examples of material factors which could justify a difference in pay include pay increases made to retain an employee who would otherwise have left, the location of staff and the relative experience which each employee has.
Equal pay claims are currently occupying a lot of the employment tribunal’s administrative resources, with mass claims brought by supermarket staff, reported in our alert in October 2016 still working their way through the system.
The first gender pay gap reports for large private and voluntary sector employers (those with 250 employees or more) are due by 4 April 2018. Large public sector employers must report by 30 March 2018. Employers should have captured their first set of gender pay gap data in April 2017.
Employers need to be mindful of any pay discrepancies between male and female staff and either take steps to correct it or ensure that there is a reason for it which is justifiable and not related to gender.
If you have any queries relating to equal pay or discrimination in the workplace, or if you have any other employment law or HR queries please contact Joanne Holborn, Tom Scaife or Caroline Rayner on 01228 552600 or 01524 548494.