Partner Sue Dowling, in our Employment Law team, reviews pay gaps and mandatory reporting in the workplace.
The gender pay gap
The Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 came into force on 6 April 2017 requiring all private and voluntary sector organisations with 250 or more employees to publish data on their gender pay gap. The purpose of this mandatory reporting is to encourage and support women in the workplace. The Department of Education (DoE) was the first government body to publish its gender pay gap figures, reporting a mean pay gap of 5.3% and median pay gap of 5.9%.
The Equality and Human Rights Commission
The Equality and Human Rights Commission (EHRC) published a report on 15 August 2017 (‘Fair opportunities for all: A strategy to reduce pay gaps in Britain’) recommending several ways in which to minimise the gender pay gap. These include promoting stereotypically gender-specific subject choices in schools to encourage female students to choose science, technology, engineering and mathematics subject choices and male students to consider qualifications and careers in childcare and caring, thus improving gender diversity. In addition, the report recommends that employers encourage their employees to share the childcare responsibilities, enabling women to participate more fully in the workplace so that children do not have as great an impact on their careers. This may be achieved by offering more generous terms for paternity and shared parental leave.
Going further?
The EHRC highlighted the need to not only tackle gender pay gaps but also disability and ethnicity pay gaps. In many instances, workplace norms have an effect on all three characteristics resulting in women, ethnic minorities and the disabled being under-represented. The EHRC has emphasised the need for flexible and part-time working in order for these characteristics to be fairly represented in the workplace. Currently, part-time roles are predominantly being done by women, ethnic minorities and the disabled, with many senior roles only being offered on a full-time basis. This leads to these individuals often taking low paid and low skilled jobs. The report recommends that all employers should offer more flexible working. In addition, recruitment, promotion and pay also affects these three characteristics with an element of discrimination being present when deciding who to hire or promote. The EHRC has emphasised the need to use fair and transparent systems in order to ensure that the way in which applicants and employees are treated is on their merit and not on personal characteristics. The report also encourages training in equality and fair-decision making.
The future of pay gap reporting
The EHRC has made several recommendations aimed at the government and businesses. As such, employers should take note of the recommendation that pay gap reporting should not only be limited to gender but should also extend to ethnicity and disability. Therefore, although many of the recommendations in the report focus on all three characteristics and currently only gender pay gap reporting is relevant and mandatory, to implement these recommendations will not only affect the under-representation of women in the workplace but may also have a knock-on effect for the other two characteristics, so that any extension of the pay gap reporting requirement will not only be anticipated but more importantly, may not then lead to surprising figures.
For further information or legal advice, please contact law@blandy.co.uk or call 0118 951 6800.
This article is intended for the use of clients and other interested parties. The information contained in it is believed to be correct at the date of publication, but it is necessarily of a brief and general nature and should not be relied upon as a substitute for specific professional advice.
