Why is the Gender Pay Gap back in the headlines?
The Gender Pay Gap is back in the headlines, but not for the right reasons, because actually many of the news stories – Carrie Gracie’s resignation from the BBC, for example – are really about Unequal Pay and the two are very different things. Now, I could use this blog on going through the differences but I’ll just show you this quick image below:
- The men and women symbols represent men and women along the earning spectrum, working in unskilled roles to senior roles.
- Where there is a woman above the line and a man below the line at a particular point on the spectrum, this represents an equal number of men and women working at that level.
- Where there is a woman both above and below the line, this means that women are dominating that particular level and where a man is both above and below the line this means that men are dominating that particular level.
- Where there is a large man symbol, this represents men earning more than women working at the same level.
We will start at the top left box, and work clockwise:
TOP LEFT – Here we have an even spread of men and women undertaking jobs at different levels and those in the same job are earning the same - represented by the symbols being the same size. Therefore there would not be a gender pay gap or an equal pay problem.
TOP RIGHT – Here we have women undertaking more lower skilled/unskilled roles and men dominating more highly skilled/director level jobs. Because men are dominating highly skilled posts they are on average getting paid a higher wage than women who are undertaking lower skilled, and therefore lower paid, jobs, there will be a gender pay gap. However, there is no equal pay problem because men and women who are doing the same roles are getting paid the same
BOTTOM RIGHT BOX – Here we have more women undertaking unskilled jobs, and more men taking highly skilled/director level jobs. There is likely therefore to be a gender pay gap.
But, in addition, the men occupying mid-level positions are being paid more than the women undertaking equivalent roles – this is represented by the larger male symbol – which suggests that there may be an equal pay problem as well.
BOTTOM LEFT BOX – It is unlikely that there will be no gender pay gap but an equal pay problem so note this final box more for illustratative purposes. There is again an even spread of men and women undertaking jobs at different levels. At the junior and senior levels, the men and women are earning the same but at the middle level, men are earning more than woman, which suggests both an equal pay problem.
But 2018 is the year for Gender Pay Gap Reporting, right?
Yes. The Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 that came into force in April last year require employers with 250 or more “relevant” employees to report their gender pay gap by 4th April 2018. Well, actually, they require employers to report:
The overall mean gender pay gap
The overall median gender pay gap
The mean bonus pay gap
The median bonus pay gap
The proportion of men and women who receive a bonus
The proportion of men and women in each pay quartile.
Easy, right? Hmmm, not for everyone. Yes, easy to think back to GCSE (or O Level) maths and relive the memories of learning the mean, median and mode. Easy to check out the gov.uk guidance to see the steps you need to take. Not so easy when you’re actually trying to work out who is definitely included or excluded, what’s included and what’s excluded.
There is guidance, published by ACAS, and we worked closely with the Government Equalities Office on it. The challenge is that employers, particularly in manufacturing and engineering, have very complex pay structures. We know, for example, that shift premium is included in the pay calculations and overtime is excluded. But what if someone is earning shift premium but only because they are on overtime? And what if the employer’s payroll system isn’t able to identify that?
Over at EEF we don’t like “grey areas” and when told employers can take a “common sense approach” that just reaffirms that there are indeed grey areas.
What if employers do get it wrong…or indeed don’t report at all?
This is the interesting part.
The Equality and Human Rights Commission (EHRC) is currently consulting on “Enforcing the gender pay regulations”. Now I’m no legal expert, but even my first thought was – the Regulations don’t allow for such enforcement. *confused face* so I’m sure that in itself will be up for much debate in the consultation, let alone the questions on how they intend to go about enforcement.
The consultation suggests that the EHRC would firstly focus on non-compliance, i.e. those that haven’t reported. If it has the capacity it will then move onto “inaccuracies” – let’s come back to that one!
To report early, or not to report early?
This is when we do bring gender pay gap reporting back into the headlines as over 500 companies, 70 of which are manufacturers, have currently reported.
Unfortunately, the current reports have been subject to much media scrutiny, particularly those companies reporting a 0% gender pay gap…..now I’m not saying that companies can’t have a 0% gender pay gap but when the pay quartiles demonstrate a high proportion of men in the higher quartiles, you do begin to question.
And some companies that have reported early have then found inaccuracies and changed their reports.
So it again begs the question, do I report early with what I have or do I wait and check the figures one more time?
My immediate response would be to report when you feel confident your numbers are as accurate as possible so as not to have to make further changes.
In scope of gender pay gap reporting? Checked your post recently?
However, my concern is in the form of a little letter that some employers who are in scope of the Regulations have received.
These letters, from the Government Equalities Office, tell employers that they are in scope. That’s fine. They remind them they need to report, also fine.
They then say that you need to register on the Government’s online gender pay reporting portal by the 31st January 2018. This is new. This is not in the Regulations or in anything that the Government has suggested until now.
Then for the biggie. The letter goes on to say that the Government plans to publish:
And they plan to do so before the reporting deadline of 4th April 2018.
Accuracy not urgency should be the way forward
In view of this threat, we recommend that companies that have not yet registered on the portal do so as soon as possible to avoid the risk that their name ends up on the “naughty list” – even if you had originally intended not to register until you were ready to publish.
Having said that, we should make clear that we completely oppose the naming and shaming of employers who have not registered or reported before the 4th April 2018 deadline. A deadline is a deadline for a reason.
Yes, promote “trailblazer” companies who have led the way in reporting, but let’s remember that among those that have reported there are arguably inaccuracies. Surely it’s better to allow companies to get their house in order, crunch the numbers, check and check again and then publish.
ONS figures tell us that manufacturing has a higher than average gender pay gap. We also know that the core reason for this is that we struggle to attract women into the industry – our infographic tells us that:
Manufacturers therefore want to tread carefully, get the figures right, get their accompanying narrative right. Accuracy, not urgency, should be the way forward.
In scope of the gender pay gap reporting regulations and not sure how to crunch those numbers? Or thinking about what you should put in your voluntary narrative? There's still time to attend our Gender Pay Gap Reporting: How to Comply seminars here