International Women’s Day takes place today and provides a great opportunity for employers to take action on unequal pay in the workplace which still exists.
The theme for this year is #BreaktheBias and the organisers have challenged us all to:
- Imagine a gender-equal world.
- A world free of bias, stereotypes, and discrimination.
- A world that is diverse, equitable, and inclusive.
To coincide with International Women’s Day, the Equality and Human Rights Commission (EHRC) has reemphasised to employers, who are required to report their gender pay gaps, that they play an important role in ‘breaking the bias’ in workforces across the UK.
What are the gender pay gap regulations?
The gender pay gap regulations, which are enforced by the EHRC, came into effect in April 2017. They apply to large private and voluntary sector employers (defined as those with 250 more employees on 5 April each year).
Under the regulations, employers must publish:
- Overall gender pay gap figures for employees, calculated using both mean and median average hourly pay.
- The proportion of men and women in each of four pay bands (quartiles), based on the employer’s overall pay range. This is supposed to show how the gender pay gap differs across an organisation, at different levels of seniority.
- Information on the employer’s gender bonus gap (that is, the difference between men and women’s mean and median bonus pay over a 12-month period).
- The proportion of male and female employees who received a bonus in the same 12-month period.
- Employers have the option to include a narrative explaining any pay gaps or other disparities and setting out what action, if any, they plan to take to address them. The provision of a narrative is strongly encouraged, but is not mandatory.
The EHRC previously suspended the regulations due to the pandemic but this no longer applies and employers must once again submit their gender pay gap data. The deadline for public sector organisations to submit their data is 30 March, with large private companies required to submit their reports on 4 April.
According to Personnel Today, currently, only a quarter of UK organisations required to publish their data have done so, despite the deadline fast approaching.
Gender pay gap statistics and trends
Over the past decade, the gender pay gap has slowly been declining. According to the Office for National Statistics, data published in April 2021, showed the gender pay gap for full-time employees stood at 7.9%, down from 9.0% in April 2019. Whilst it will take many years and considerable efforts from employers to close the gap completely, this is an encouraging trend that shows the gap could be eradicated in the not too distant future.
It has been reported the pay gap for women under 40 is close to zero. This statistic suggests that older women or women who have children are penalised disproportionately within their careers. Therefore, this puts their future financial stability at risk.
Also, women who are disabled or are from certain ethnic minorities are more likely to have a higher gender pay gap compared to their white, non-disabled male colleagues. Other common issues are the continuing disability employment gap, where disabled women are less likely to be in work compared with non-disabled women and men.
Benefits of reporting gender pay gaps
Slowly over time, more employers are understanding the importance of demonstrating what they are going to do about pay gaps. Having the conversation about this is one step closer to gender pay gap equality, it helps identify and remove barriers to women’s progression at work and stops factors contributing to unequal pay.
Reporting gender pay gaps helps empower female employees by shifting the accountability from employees onto employers. It allows women to challenge employers when there is a larger gender pay gap or a non-moving pay gap to ask what their employer is going to do about it.
It will also improve morale around the business and the company’s culture of being inclusive. These types of values are what many people look for in companies when applying for jobs. Showing that an organisation is inclusive of everybody gives a business a great reputation amongst its employees. A happier workforce will also drive productivity and economic growth.
Comment
As mentioned previously, with the deadlines fast approaching (30 March and 4 April), employers must act quickly by reporting their gender pay data within one month of the relevant snapshot date. Private companies who are not considered “large” can still nonetheless carry out a gender pay gap review on a voluntary basis and are encouraged to do so as best practice.
It is also vital that employers not only understand but are to follow up on their gender pay gap obligations.
The aim is to see all employers resolve their pay gaps and what better day to start than International Women’s Day.
How can Nelsons help?
For further information or advice in relation to unequal pay, sex discrimination, or any related subjects, please contact a member of our expert Employment Law team in Derby, Leicester, or Nottingham on 0800 024 1976 or via our online form.
Contact us