Publishing your gender pay gap – are you ready?

New gender pay gap reporting requirements come into force on 31 March 2017. Public sector bodies with 250 or more employees must publish their gender pay gap data. Are you ready? Do you know what you need to publish? Gender pay gap and equal pay – are you clear on the difference? Do you understand the link with this new requirement and your legal requirements under the Public Sector Equality Duty? What are the causes of the gender pay gap in Britain? What are you doing to actively reduce your gender pay gap?

There has been some confusion in the public sector on whether existing specific duty regulations have required colleges, universities, local authorities and other public sector bodies to publish their gender equality pay gap. The Equality Act 2010 (Specific Duties and Public Authorities) Regulations 2017 clears up this confusion. In force from 31 March 2017, specified public authorities with 250 or more employees will need to publish their gender pay gap data.

The new regulations will become part of the specific duties under the Public Sector Equality Duty of the Equality Act 2010.

Specified public authorities with 250 or more employees will need to publish the following four measures of information, based on a ‘snapshot’ of pay information taken on 31 March each year:

1. Your overall mean and median gender pay gaps as these are complementary indicators. You will need to publish the difference between the average (mean and median) hourly rate of pay for male and female employees (excluding employees being paid at less than their usual rate because they on ‘leave’ as specified);
2. The difference between the mean bonus payments paid to men and women as well as the proportion of male and female employees that received a bonus. So you will need to publish the difference between the average (mean and median) bonuses paid to male and female employees over the period of 12 months ending with the ‘snapshot’ date of 31 March.
3. The proportion of male employees, and the proportion of female employees who were paid bonuses during the period of 12 months ending with the snapshot date.
4. The proportions of male and female employees in each quartile of the pay distribution.

You will need to publish the information on your website in a way that makes it accessible to employees and to the general public. So, in the same way that you need to publish your equality information on your website on an annual basis, you will need to also publish the above gender pay gap information. You can include the gender pay gap information in your equality information report, provided that this is clear to someone looking for your gender pay gap information on your website, and it is updated annually on the 31 March.

You will also need to provide the above information on a digital portal to be maintained by the Secretary of State, within 12 months of the 31 March snapshot date each year.

What is the difference between the gender pay gap and equal pay?

Whilst both equal pay and the gender pay gap deal with the disparity of pay women receive in the workplace, they are two different issues:

1. Equal pay means that men and women in the same employment performing the same jobs, similar jobs or work of equal value must receive equal pay, as set out in the Equality Act 2010. Many colleges and universities abide by these legal requirements. However, there are some examples where these requirements are potentially breached. For example I have found situations where assessors in engineering and construction (predominantly men) are paid at a higher rate that assessors in hairdressing (predominantly women). However, assessors in these areas are carrying out equal work and it is therefore likely that this situation breaches legal requirements and needs to be addressed. You can find out more information on Equal Pay on the Acas website here

2. The gender pay gap is a measure of the difference between men’s and women’s average earnings across an organisation or the labour market. This is the information that you need to publish on your website on 31 March 2017. 

Acas guidance

Acas and the GEO (Government Equalities Office) have launched new guidance to help organisations in the private and voluntary sectors to comply with their gender pay gap reporting regulations. Although there are subtle differences with public sector requirements, such as 5 April date for publication rather than 31 March, public sector organisations should find the principles in the new guidance helpful.

The guidance sets out a framework of five key steps:

1. Extract the essential information
2. Carry out the calculations
3. Develop a supporting statement that provides a narrative to help someone reading the statement to understand the organisation’s view of why the gender pay gap is present and what the organisation intends to do narrow the gap. The narrative might explain key challenges, for example a senior and middle management that is predominantly men (or women)
4. Publish the gender pay gap information
5. Implement plans to manage the gender pay gap

The guidance contains examples of how to carry out the calculations, what to write in the supporting statement, a glossary of key terms, actions to consider for reducing the pay gap and a template for gender pay gap reporting

(note to readers - I have updated the links below to reflect updated ACAS guidance available in Feb 2018)

You download the ACAS / GEO guidance:

• a new guide on managing gender pay gap reporting here
• a new miniguide on gender pay gap reporting in the public sector here
• fact sheets on gender pay reporting here
• the reporting template here
• the top ten myths about gender pay reporting here

Gender pay gap reporting and the link with the Public Sector Equality Duty and accompanying specific duties

Public sector bodies, including schools, colleges, independent training providers and universities, have a Public Sector Equality Duty. This means that providers must have due regard to the need to:

• Eliminate unlawful discrimination, harassment and victimisation
• Advance equality of opportunity
• Foster good relations.

‘Advance’ includes the need to:

• Remove or minimise disadvantage experienced by people who share a protected characteristic
• Take steps to meet the needs of people who share a protected characteristic
• Take steps to take account of people’s impairments
• Encourage people with a protected characteristic to participate in public life or other activities where participation is disproportionately low.

So this means that there is an expectation that you don’t just publish your gender pay gap, but actively look to implement a plan for addressing your gender pay gap. The Acas guidance mentioned above has some ideas that you might find helpful. An understanding of the causes of the gender pay gap might also help - some of these are discussed below.

The gender pay gap reporting requirement also links with specific duties to set and publish 4 year equality objectives and to report on progress on meeting these objectives on an annual basis. It is likely that you will want to include a gender pay gap equality objective in your set of current equality objectives.

Causes of the gender pay gap

In the Britain, there is an overall gender pay gap of 19%. The reasons for this are complex and often overlapping but here are some of the factors:

• Females may outperform males at school, but tend to end up concentrated in employment sectors that have a narrower scope for financial reward. Many of the highest paying sectors disproportionately contain males.
• Women more often work part-time because of caring responsibilities. They are also more likely to take time out to raise a family. Sharing care between fathers and mothers is an important key to reducing the gender pay gap (see my equality news update this month on ‘Pregnancy, maternity – but what about Dad’s’?)
• Unconscious bias, with stereotypical assumptions that women do not want promotion or are not in a position to accept promotion because of caring responsibilities. Although women make up 47% of the workforce, only 34% are managers, directors or senior leaders.
• Occupations that are predominantly made up of women often have a lower average pay. This suggests that work with a higher proportion of women is economically devalued

Research on staff recruitment carried out by the University of Colorado showed that if there is only one woman in a hiring pool of four, the chances of her getting the job is statistically zero. To see why, watch a video clip from Harvard here.

A new study published in January by the Resolution Foundation has revealed that, while the gender pay gap for women in their 20s has halved to just 5%, this progress is undone in later life. The research recognised a rising higher educational participation, which women in particular have benefited from, and more women breaking into high-paying industries and occupations. However, there is a continuing pay penalty with having children. Unless tackled this will mean that current and future generations of working women will continue to face a significant life earnings penalty.

Responding to the research the chief executive of the Equality and Human Rights Commission Rebecca Hilsenrath said: ‘We welcome the reduction of the pay gap for younger women, but it’s only good news if it’s sustainable and meaningful – not if it’s just a postponement of the bad news for later in life. It is time to abolish the parent penalty’.

You can download the study by the Resolution Foundation here

What if I fail to publish the gender pay report?

It is a legal requirement for all relevant employers to publish their gender pay report. Failing to do this within one year of the snapshot date is unlawful. The Equality and Human Rights Commission has the power to enforce any failure to comply with the regulations. Providers also run a reputational risk if they fail to publish the information, generating suspicions behind why an employer failed to publish their gender pay gap and generating unfavourable impressions on the importance of equality and diversity to the organisation, both of which could be unfounded.