Thompsons calls on government to penalise gender pay offenders
In April 2017, the government introduced legislation requiring organisations with 250 or more employees to report annually on their gender pay gap – a measure of the difference between men’s and women’s earnings across an organisation, expressed as a percentage of men’s earnings.
Organisations with fewer than 250 employees can publish their pay gap on a voluntary basis. Public sector organisations have to publish their gender pay gap by 30 March 2018 (4 April 2018 for private businesses and charities) and then annually. The publications must be of: mean and median gender pay gaps; the mean and median gender bonus gaps; the proportions of men and women who received bonuses; and the proportions of male and female employees in each pay quartile.
The data is also published on a central reporting website: gender-pay-gap.service.gov.uk and as January 1, 509 employers have published data on their gender pay gap up to April 2017.
Employers are encouraged to publish an action plan alongside the figures (on their website if they have one), demonstrating what steps they will take to close any gender pay gap. However, worryingly, a report commissioned by the Government Equalities Office and published in November 2017 found that a third of employers think the need to reduce the gender pay gap is low priority.
There is some concern that, by accident or design, the data is not being calculated correctly and is therefore unreliable. The Government Equalities Office report found 41% of employers were unclear about how the gender pay gap is calculated and that although almost all employers said they knew what a gender pay gap means, in practice many confused the concept with equal pay.
Equal pay and the gender gap are a means towards equality but they tackle different problems.
Equal pay, as a legal right, is the right not to be discriminated against because of gender, race, disability, religion or belief, sexual orientation, gender status or age in terms of pay but there are legal restrictions that mean that, in relation to gender discrimination, the right only applies to comparisons between people doing equal work.
The gender pay gap data measures the differences between pay at all levels of an organisation from the top to the bottom. It is possible that, at each level of an organisation men and women are paid equally but if most of the jobs above the middle rank are done by men and most of the jobs at the levels below the middle rank are done by women, the organisation will have a (potentially significant) gender pay gap.
Equality matters at the level of equal work but also in terms of access to senior jobs, career progression, breaking down the barriers to jobs that are traditionally associated with men or women, training and skills.
While it is positive that companies are being made to report their gender pay gap, unless there is a greater understanding of the causes, a real commitment to achieving equality and action taken to remedy inequalities, there will not be any significant change.
The many factors that contribute to persistent inequality mean trade unions are vital in the fight and why they remain at the forefront of striving for equality. Trade unions work on fair pay systems, fair pay, a national minimum wage, a rate for the job, clear and transparent progression mechanisms and on access to training and skills. Promoting equality of opportunity and challenging discriminatory stereotypes are all important if there is to be more than just an annual data splurge.
It will take more than one year before we are able to tell what impact the requirements are having but, in the meantime, small changes could make a difference to their effectiveness, such as obliging employers to publish action plans and imposing penalties on those who fail to report accurately or to take action.
- Caroline Underhill is the equal pay practice lead at Thompsons Solicitors