Written by Brabners LLP
Get up to speed with the latest recommendations from BEIS on employer compliance with gender pay gap reporting!
You may remember that there was extensive media coverage on the gender pay gap earlier this year. A number of companies were named and shamed for having large divides between the average pay of male and female employees. It has become a contentious issue across the UK, which has one of the highest gender pay gaps across Europe.
What is gender pay gap reporting then?
The gender pay gap refers to the difference in average payment between men and women.
To combat the gender pay gap, new legislation was introduced in 2017. The Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 (the Regulations) requires private and public sector companies with more than 250 employees to publish their gender pay statistics on an annual basis. This requirement applied from 30 March 2018 for public sector employers and 4 April 2018 for private and voluntary sector companies. The legislation also confirmed how the gender pay gap should be calculated.
How many businesses complied with the new legislation? The deadline was met by 10,528 employers in the period covering 2017-2018. Although, a large number of organisations submitted their statistics after the deadline.
BEIS’ concerns with gender pay gap reporting
On 2 August 2018, the Department for Business, Energy and Industrial Strategy (BEIS) released a report discussing employer compliance with the Regulations. The findings of the report indicate that some businesses found the process of producing figures challenging and required assistance from external organisations such as the Chartered Institute of Personnel Development (CIPD).
BEIS also confirmed that there has been confusion as to which members to include in the workforce. Notably, the current guidance on the Regulations does not provide for the inclusion of equity partners in limited liability partnerships (LLPs) – this may well produce an inaccurate representation of data, given that partners normally receive the highest pay.
There has also been criticism of the fact that organisations are not required to include an accompanying narrative when reporting. This means the statistics are not put in context nor do they contain comments on implementing action plans where necessary.
BEIS also argued that there is lack of effective sanctions for businesses that fail to comply with the reporting requirements. BEIS made a call for clearer sanctions to be put in place at an earlier stage.
BEIS appears to conclude that the introduction of gender pay gap reporting has proved challenging, but achievable for businesses. The BEIS report calls for more clarity in the guidance accompanying the Regulations to help employers. BEIS also makes additional recommendations for narrative reports and employer action plans on published statistics to be required.
This bulletin is for general guidance purposes only and should not be used for any other purpose.