Gender pay gap reporting – 7 months from the ‘snapshot’ date, where are we up to?Print publication
The deadline for employers to publish their first gender pay gap (GPG) reports is now only 5 months away but thousands of employers have yet to publish their reports. In this update we look at what we know now that we didn’t know 6 months ago and what employers can learn from the reports published to date.
A trickle rather than a flood
There had been talk of employers with positive gender pay gap (GPG) reports rushing to upload them to the Government website in an attempt to gain good publicity and kudos with staff and stakeholders. That has not proved to be the case and the anticipated flood of reports has proved to be more of a trickle. According to Government figures there are approximately 7,000 UK employers with 250 or more staff but, at the time of writing, only 199 of them had uploaded their reports to the website. With around 6,800 further reports due by 4 April 2018 we may see the ‘flood’ happen a little later than expected and possibly in the last few weeks of March!
Not acceptable to give ‘no timeline’ for GPG report
Justine Greening, Minister for women and equalities and Education Secretary, has said in a recent speech that ‘it is not acceptable for companies to give no timeline on when they plan to publish their gender pay gap before the deadline next April’.
To those employers who are holding off publishing because their reports paint a less than ideal situation, she says, “It’s OK to admit that you don’t have all the progress that you want, but you must show you have a plan for taking the next important steps”.
To narrate or not to narrate?
It is not compulsory to provide a narrative to accompany a GPG report (for example to provide background and context to the data and set out what the organisation is doing to improve any gaps). Nevertheless, most employers so far have chosen to do so. Our view is that a narrative is a sensible addition to a GPG report as the naked data by itself could present a distorted impression. A narrative is the company’s chance to blow its own trumpet in respect of any ongoing equality initiatives or to provide background information that may help to put a poor set of statistics into a better light.
Who has reported so far?
Household name employers, PwC Services and Virgin Money have both submitted their reports. PwC Services reported that on average their female staff earn 12 per cent less (and Virgin Money 32.5 per cent less) per hour than male employees. Around half the companies reporting so far have reported gender pay gaps in double figures. This is unsurprising given the UK’s gender pay gap stood at 18.1 per cent in 2016 (down from 20.2 per cent in 2011). Other employers can take comfort in the knowledge that even these well-known, larger companies face GPG challenges. The stigma will lie in companies failing to step up and acknowledge GPG challenges rather than in the reporting of them.
What are the sanctions?
There are no civil penalties for non-compliance with the GPG reporting requirement but it is without doubt a matter of governance. The Government has stated that it intends to closely monitor levels of compliance over the next few years. It has indicated that it will consider:
- producing tables by sector showing employers’ reported pay gaps
- highlighting employers who publish helpful explanatory information with their pay report
- naming and shaming non-compliant employers.
It goes without saying that the key risk in non-compliance is reputational. Failing to report at all is likely to be viewed by many as a greater transgression than reporting a wide gender pay gap. Employers who are concerned that a poor GPG report might lead to equal pay litigation can be reassured that the high level, generalised data required by the GPG report would not, of itself, provide sufficient foundation for an equal pay claim.
Most employers will already have started or completed the steps below but, as a reminder, we recommend:
- Carrying out a voluntary pay and bonus audit and pay quartile analysis to identify any potential pay gaps.
- Considering the reasons behind any pay gaps (e.g. staff transferring into the company on protected terms) and taking advice on whether these reasons might provide a defence to any future equal pay.
- Considering the extent to which the organisation will provide further information to explain its pay gap. Employers can provide as much additional information as they wish to explain any apparent pay gaps.
- Ensuring that the organisation has a clear strategy and buy-in from the board and senior managers in relation to achieving gender pay equality.
- Ensure that the GPG report is published to the Government website in good time and without undue delay.