It has the potential to trigger a serious, decade-defining shake up in employment in Britain but, so far, the requirement on companies to publish data on their gender pay gap has not got the attention it warrants. With just three weeks to go, there’s no time to lose. Alice Wood, Head of Corporate Responsibility at Lexington Communications, explains more below.
By April 4th, all businesses with 250 employees or more – including many law firms – will be required to share their gender pay gap, following legislation enacted eight years ago under the last Labour Government. The Equality Act 2010 brought together several different strands of legislation regarding discrimination – including the Equal Pay Act – paving the way for the introduction of the Gender Pay Gap Regulations last year.
Not to be confused with equal pay auditing, gender pay gap reporting measures pay discrepancy between men and women irrespective of role. It is an indicator of gender inequalities relating to access to jobs and development, and reflects social norms that determine the type of career men and women choose to pursue, as well as the roles they play in childcare.
To paint a full picture, the Government is requiring companies to provide information on the pay gap, the bonus gap, on the proportion of men and women receiving bonuses, and on the proportion in each quartile of the organisation’s pay structure. The aim is to highlight issues around women’s progression, from recruitment to flexible working, and support change across the business landscape.
Crucially, and unlike the Modern Slavery reporting requirements, this information is being published on an easily searchable, public-facing website. That’s how we know that only 884 out of 9,000 companies have reported so far, and also how we know that Easyjet has a 45% median gender pay gap, while Pinsent Masons has a 22% gap and Deloitte’s is nearly 18%.
This transparency will undoubtedly have implications, especially for those working in employment law. For starters, the EHRC has been consulting on how to enforce the regulation, including what to do with companies that are non-compliant and how best to help ‘organisations achieve what they ought to do’. Following the reporting dates, the EHRC will ‘assess the scale of non-compliance and decide whether it is necessary to take a staged approach to enforcement’.
Beyond this, while the reporting doesn’t measure pay equality and is intended as a motor of social change, revelations about women systemically being paid lesser salaries are bound to shine a spotlight on wider issues around discrimination on gender or minority lines. Already, we are seeing signs reporting could expand to other diversity challenges, for example around race, disability or age.
It’s been more than 40 years since the Equal Pay Act, and more than 30 since it was amended to require equal pay for equivalent work, but only this month a case has been brought against Tesco alleging pay discrimination, on the basis that women in store are paid less than men in the warehouses. Meanwhile the BBC has been under fire too. As Labour’s Emily Thornberry suggested recently, there may be cause for a new version of the Act to address this continuing problem.
It’s early days, but it’s vital that the legal profession starts thinking about this issue, not just in terms of potential discrimination lawsuits, but in terms of getting its own house in order. That means analysing the figures and, more importantly, developing a plan to address any discrepancies that emerge. Despite a 31% pay gap, TSB was praised by Government for being willing to tackle things head-on by publishing a bespoke three-step plan.
The release of the data – especially for businesses with sizeable gaps – is a potential reputational flashpoint, so it’s imperative to have a clear and coherent narrative in place from the outset that can be communicated to both external audiences and your internal team.
That a business is on a journey towards gender equality rather than already there does not have to be a crisis – it’s about thinking about what story you are telling, and what steps you are taking towards a better outcome for staff. Politicians, the media and your employees must be able to see you are committed to change and understand the value and purpose of gender pay gap reporting.
Ultimately, businesses thrive when women thrive – irrespective of industry. Gender pay gap reporting is just the first step on a long ladder towards embedding a more balanced and diverse workplace culture. Here’s hoping it won’t be the last.