The obligation for employers with 250 or more employees to publish an annual report on its gender pay gap is expected to come into force on 1 October 2016. However, some employers have decided to act now to address their gender pay gaps.
Final legal obligations still unclear
Speculation is rife as to when the final version of the Equality Act 2010 (Gender Pay Gap Information) Regulations 2016 (the Regulations) might be published by the government. Suggestions include just before the intended implementation date of 1 October 2016 to the implementation date slipping to April 2017, and with it, it must be assumed, the publication of the final Regulations.
We still do not have clarity on many of the key aspects of the Regulations, such as whether group companies can publish separate reports, how to identify and calculate the relevant bonus payments and how to set out the quartile information. However, many organisations are already taking action to address their gender pay gaps and those who have not yet started to prepare risk being left behind.
Setting the standard
For example, following a pay analysis by Times Higher Education, which showed that the gender pay gap between full-time academics in the UK is 11%, the University of Essex has decided to give a one-off 3% salary increase to its female professors pay to bring their average salaries level with men. The analysis showed that nationally there is a persistent pay gap for female professors, who are paid 5.8% less on average than men (£74,682 against £79,252). Although the University of Essex's gap was shown to be just 3.1% (£2,439), it decided to act quickly and decisively to address this.
Similarly, King's College London has announced its intention to offer roles to women before men of equal capability in an attempt to reduce its gender pay gap which has been shown to be the biggest of any large university taking into account all kinds of academic staff.
On 11 July 2016, the Mayor of London, Sadiq Khan, also published City Hall's first gender pay audit. The audit revealed a gender pay gap of 4.6%, a difference in average full-time hourly pay of £1.04. Less than one third of staff earning more than £100,000 in May 2016 were female, despite women making up more than half of all City Hall employees. In response to the audit result, the Mayor has also launched an action plan for full pay equality across the Greater London Authority including Transport for London and the Metropolitan police, which are now expected to produce their own gender pay audits.
Such actions support steps being taken to increase gender diversity across senior roles and on company boards. More than 70 financial services firms have recently signed up to a charter intended to improve gender diversity in senior positions in the financial services industry. In addition, the government has announced a new review on women in senior leadership with the aim of improving female representation in leadership positions of British business, broadening the ambition to the entire FTSE 350 and raising the target to 33% of women on boards by 2020.
What should employers be doing?
- Although there is still uncertainty over the detail of gender pay gap reporting, there are steps which employers can take now to prepare for the implementation of the Regulations, including:
- carry out a pay audit to identify what your likely gender pay gap will be and the reasons for this;
- if possible, benchmark your gender pay gap within your industry to identify whether your figures are likely to be noteworthy (the ONS collates figures for different sectors);
- consider what information you will want to add to any report to set your figures in context;
- start to plan a strategy to address your gender pay gap;
- consider your communication strategy, both internally and externally, for when you publish your gender pay gap figure.
This document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.