Equal Pay Day puts the spotlight on gender pay gaps

10 November 2017 is Equal Pay Day – the day when women effectively stop earning for the remainder of the year compared to men. This is based on the current (mean) gender pay gap which the ONS has revealed to be 14.1% for women working full-time.

The Fawcett Society, the organisation behind the concept of Equal Pay Day, is leading a campaign urging politicians and employers to make a ‘pay gap pledge’ to close the gender pay gap for good.  Following hot on the heels of recent legislation requiring employers to publish their gender pay gaps by April 2018, this brings the issue of gender pay into sharp focus and reinforces the importance employers need to attach to tackling their gender pay gaps.

In short, employers of 250 or more employees must publish prescribed information relating to their gender pay gaps on both their own websites and on the Government’s specially designated website by 4 April 2018. The Government estimates that this will apply to around 9,000 employers with approximately 15 million employees.

To date, just 219 employers have embraced the task and published their information. This is available to view via the Government’s gender pay gap viewing service. The contrast in data is stark, ranging from a mean hourly pay gap for one employer of -35.4 (meaning that the average hourly rate of pay for is higher for women than for men – for every £1 being paid to a woman, a man is receiving approximately 65p) up to a gap of +54.2 for another employer (demonstrating that the average rate of pay is higher for men than for women – for every £1 being earned by a man, a woman is receiving approximately 46p). Some statistics of particular interest are those of the Commission for Equality and Human Rights (mean gap of -7.5); ACAS (mean gap of +7.1) and the Department for Education (mean gap of +5.3).

It is important to remember that whilst a gender pay gap may raise the profile of equal pay within an organisation and lead to greater scrutiny of pay by employees, a pay gap is not the same as unequal pay. There may be many reasons for a pay gap  including having a higher proportion of women to men in part-time positions, and similarly there being fewer women than men in senior roles in the organisation (and vice versa). Transparency and communication of pay structures may help assist employees to understand the reasons for any gap and, whilst there is no statutory obligation to report the reasons, many employers are taking the opportunity to publish a narrative alongside their figures. At the very least, a pay gap should  act as an impetus for organisations to query the reasons behind it and to start to work towards strategies for reducing it.

Mean bonus gaps reported so far also vary hugely from -184.6 to +467, perhaps significantly impacted by the way in which businesses are structured and suggesting that where one gender is dominant in senior positions where higher bonuses are likely to be paid, the gap will be skewed accordingly.

With less than 5 months now to go until the deadline when all affected employers must publish their gender pay gap information, it seems that there will be a flurry of last-minute activity. Employers who have yet to get to grips with their obligations should now make this a priority. The legislation is complex, numerous calculations must be made and the data must be officially signed off by a director (or equivalent).

For assistance on reporting your gender pay gap, or for a copy of our gender pay gap publications, please contact Kate Hodgkiss or Clare Gregory in our UK Employment law team, or your usual DLA Piper contact.