As has been well reported in the mainstream media, employers with over 250 employees are going to have to publish information about the difference in pay between male and female employees.
The hope for these new regulations is that it will narrow the difference in pay between men and women by effectively highlighting the issues. Unfortunately, even in 2017, a substantial gap exists between the pay of men and women. There can be no doubt that the motivation behind the regulations is virtuous and, in theory, this should be simple. However, throughout the consultation a number of issues have arisen. Examples include:
• Should employees on Statutory Sick Pay or Statutory Maternity Pay be included in any report? Their inclusion could skew any data.
• What is “pay”? Does this include all benefits or simply your basic salary?
• Will reporting take into account geographical differences in pay?
• Will the reporting requirements apply to each company or will it only apply on a group level?
• How, if at all, will employers be punished for a large gender pay gap?
As is often the way, what is easy in theory has become unclear and uncertain. Fortunately, the latest draft issues have resolved some of these issues. For example, employers, to their dismay, will have to report on the gender pay gay at the level of each subsidiary entity. Further, employees on reduced pay are not to be included in an employer’s gender pay gap report. Also, the updated regulations have made it clear that if an employer does not comply with their obligations the Equality and Human Rights Commission could take enforcement action against them.
However, there is still minimal bite in the regulations. It does not seem that there are any provisions to penalise those employers with large gender pay gaps. It seems that the Government is hoping to utilise the always fair and just court of public opinion (please note the sarcasm). Although, we should note that the gender pay gap report may give affected employees the ammunition they need to pursue an equal pay claim. However, this reliance on the existing equal pay law suggests that the Government believes the barrier to an equal pay claim is a lack of information rather than, for example, tribunal fees.
The latest regulations are not perfect, and it is unclear whether they will make a difference. At the time of writing, we are still awaiting the Government Guidance which will “hopefully” shine more light on to the issues in the areas of concern.
It is expected that gender pay gap reporting will come into force from 6th April 2017 with the first reports due within a year. Therefore, employers should take steps to prepare for reporting. For those with lots of employees, over several sites or several subsidiaries, this will be a laborious process. If you have questions or require any assistance in preparing for gender pay reporting, please contact employment@herrington-carmichael.com
