The 4th of April has passed, and the first deadline to report gender pay gaps for companies with over 250 employees went with it. Even so, it’s reported that over 1500 companies have missed this deadline. Companies who failed to report on time face unlimited fines, and being named and shamed. Before you delve into creating your report, I think a bit of background is important.
You might be asking, “what is gender pay gap reporting?”.
Gender pay gap reporting is part of the government’s work to “break the glass ceiling and create a more modern workforce”. The report involves six different calculations to figure out differences in pay between men and women.
The gender pay gap is not the same as equal pay.
To be clear, the gender pay gap isn’t to be confused to with equal pay. It’s been illegal to pay someone differently for the same work in the UK since 1970. This legislation was updated in 2010 by the equality act.
The UK legislation (1970) for equal pay states that: employers give equal treatment as regards terms and conditions of employment to men and to women, that is to say that
(a) for men and women employed on like work the terms and conditions of one sex are not in any respect less favourable than those of the other; and
(b) for men and women employed on work rated as equivalent (within the meaning of subsection (5) below) the terms and conditions of one sex are not less favourable than those of the other in any respect in which the terms and conditions of both are determined by the rating of their work.
It is illegal to discriminate in employment, because of a person’s sex.
The government’s introduction of gender pay gap reporting seeks to highlight the issue that there is a significant deficit between the number of women who occupy higher paid roles in organisations in the UK, compared to the number of men who occupy such positions. Some people might refer to this as the “glass ceiling”.
Although there is not a gap in all organisations, the average gender pay gap in mean hourly pay (based upon 10,104 companies who entered their data, as of the 4th of April, 2018) is 14.48%.
~ From this we can deduct that for every £1 a woman earns, a man earns £1.14. This statistic suggests that generally ~
if a woman earns £22,000/year; a man earns £25,080/year.
Wallstreetoasis have produced a report which highlights pay disparity between different levels of seniority in top investment banks. The report is based on data gained from 1,497 employees, over the past 4 years, from 33 top investment banks based in the US.
The report demonstrates that female first year analysts would experience a 3% difference in pay; whereas a female second year analyst would have less than a 1% difference in pay to a male.
However, at higher levels of seniority, the gap grows significantly. A male associate would typically earn 16% more than a female; and a male vice president would earn 29% more than his female counterparts.
The finance industry is just one example where a lack of equal pay and a lack of women in senior roles leads to a shocking gender pay gap. To help be a part of the reduction of the gender pay gap, see how to produce your report.
How to produce your gender pay gap report
The Advisory, Conciliation and Arbitration Service (ACAS) gives the key points on gender pay gap reporting:
- An employer must comply with the regulations for any year where they have a ‘headcount’ of 250 or more employees on the 5th of April (where the private and voluntary sector regulations apply) and the 31st of March (where the public-sector regulations apply), but employers of all sizes should consider the advantages.
- A wider definition of who counts as an employee is used here (from the Equality Act 2010). This means that workers are included, as well as some self-employed people. Agency workers are included, but counted by the agency providing them.
- There are six calculations to carry out, and the results must be published on the employer’s website and a government website within 12 months. Where applicable, they must be confirmed by an appropriate person, such as a chief executive.
- Gender pay reporting is a different requirement to carrying out an equal pay audit.
- Employers have the option to provide a narrative with their calculations. This should generally explain the reasons for the results and give details about actions that are being taken to reduce or eliminate the gender pay gap.
- While the regulations for the public, private and voluntary sectors are near identical, and the calculations are directly comparable, the public-sector regulations also take into account the public-sector equality duty.
If you have less than 250 employees, there’s no need to worry right now, you don’t need to act on this report. However, even though you’re not required by law to produce a gender pay gap report, it’s probably in your best interest to do so.
Data you need to gather
You need to ensure that you’re aware of all the data you’re going to need to create this report. The UK government website defines all the data you need to gather, ready to make your calculations. See the link below.
What you need to calculate
An employer must publish six calculations showing their:
- Mean gender pay gap
- Median gender pay gap
- Mean bonus gender pay gap
- Mean bonus gender pay gap
- Proportion of males and females receiving a bonus payment
- Proportion of males and females in each quartile ordered from lowest to highest pay.
You might be thinking this seems pretty confusing, so here are the government step by step instructions on how the calculations are made.
Once the data is compiled, businesses and charities can publish the data alongside a written statement.
Producing your written statement
The written statement is intended to aid understanding of why a gender pay gap might exist, and what the organisation intends to do to close it, for example reviews of bonus payments, pay grades, and recruitment processes. You can include what you’ve done so far to close any gender pay gaps and include forecasts for how long it might realistically take to close the gender pay gap.
Adding a narrative to your supporting statement might help the reader to understand further. For example, Millwall football club published a statement to explain why they were named in the top ten worst for gender pay gaps, to explain why their statistics appear so shocking.
Once you have your report ready
You must report this data on your company’s public facing website and on a government website, (which you can find here). https://www.gov.uk/report-gender-pay-gap-data
Any information published must be kept online for a minimum of three years and must be reported annually. ACAS and the Government Equalities Office (GEO) have produced a guide for gender pay gap reporting.