18th April 2019

Legal Issues – Gender pay gap reporting

Last year was the first year in which companies with 250 or more employees had to publish their gender pay gap information. The figures outline differences in pay and bonus between men and women, as well as the numbers of men and women over four pay brackets, known as quartiles.

The applicable companies had to publish their pay gap data on their website and report it to the government, and it was hoped that having to expose the pay data to public scrutiny would encourage employers to take steps to close the gender pay gap.

This year, the same rules apply to the calculations. The main benefit of that is likely to have been that those involved in last year’s calculations found it relatively simple to populate the data, as the spreadsheets or tools were already in place.

However, the sting in the tail is that this second set of annual figures allows, for the first time, for a comparison to be drawn. Those with sizeable pay gaps last year may have been hoping that they could point to the current data and show the public (and the government) that they had reduced their gap, at least somewhat.

Unfortunately, in general terms, the regulations haven’t made much of an impact. For example:

  1. The median pay gap has reduced, but only by 0.1% from 9.7% to 9.6%.
  2. 78% of companies still pay men more than women.
  3. Women account for only 38% of the top earnings quartile.

Worse still, the pay gap has actually widened in men’s favour in 45% of companies, including KwikFit, EasyJet and HSBC. Those companies have attempted explanations, such as EasyJet stating that it has hired more lower-paid female cabin crew, but the figures remain damning.

Both the general and company-specific statistics show that a lot more needs to be done to tackle the disparity in pay between men and women. Part of the problem might be that the regulations lack teeth; for example, there are no real sanctions on employers for failing to report or reporting incorrectly, which may mean that the regulations are not taken seriously.

Given the lack of improvement, it is possible that the government may take steps to amend the current legislation to allow more action to be taken against employers. And of course, there are still the non-legal issues of a high pay gap perhaps putting off talent from joining your ranks, and the potential for reputational damage of such a gap being displayed publicly.

For all of those reasons, employers are still encouraged to take whatever steps that they can to even the financial playing field for men and women.

If you have any questions on any of the issues mentioned in the above article please contact Seanpaul McCahill.

18th April 2019