knowledge | 5 April 2018 |
UK Organisations Publish Gender Pay Gap Figures
The deadline passed at midnight, 4 April 2018, for employers across the UK to report their gender pay gaps. The UK regulations oblige employers with 250 employees or more to publish data on the pay of their male and female employees in respect of differences in mean and median hourly pay, bonuses and the proportion of men and women in each pay quartile.
Even with legislation in place for almost a year, companies were slow to publish their data with more than 1,000 firms reporting in the last 24 hours. While over 10,000 companies published data, approximately 1,500 failed to meet the deadline. The UK Regulations contain no specific penalties for failure to publish, however, there is the potential for significant reputational damage and failing to report or misreporting will amount to an “unlawful act” which can be enforced by the UK Equality and Human Rights Commission. This will involve the EHRC notifying employers who have failed to publish their data or who have published inaccurate information that they have 28 days to publish their figures or face “unlimited” fines and convictions. Doubts have been raised as to whether the EHRC can legally impose such sanctions, however, and therefore it is likely that threat of reputational damage is still the most significant consequence of non-compliance for UK organisations.
Certainly, the media was quick to name and shame organisations, with some news websites reporting the figures live as data was published. The figures revealed that 78% of organisations pay men more than women on average. In more positive press, 8% of firms reported no gap and 14% of firms actually reported paying female staff more than male staff. The unembellished statistics highlight the importance of providing detailed explanations to accompany the data, as in isolation they risk giving an imbalanced and inaccurate representation of the organisation in question.
What is clear from the UK’s experience of mandatory reporting is that there is significant misinformation about what the gender pay gap actually shows. The existence of a gender pay gap in an organisation does not necessarily indicate discrimination by employers or that women are not receiving equal pay for equal work. The gender pay gap is the difference between men’s and women’s pay, based on the average difference in gross hourly earnings of all employees. Therefore, the gender pay gap can be caused by a multitude of reasons other than discrimination, for example, a higher proportion of women working in lower paid sectors or in part-time work, the costs of childcare and the fact that women are more likely to take time out of the workplace to take care of children and an underrepresentation of women in senior management and leadership roles within organisations.
In Ireland, the Government has committed to the introduction of mandatory gender pay gap reporting legislation similar to the UK Regulations. Following the public consultation process last year, Minister Stanton confirmed that the Government will bring forward amendments to the Private Members Bill initiated by Senator Ivana Bacik, the Irish Human Rights and Equality Commission (Gender Pay Gap Information) Bill 2017. The Bill, as currently drafted, provides that the Irish Human Rights and Equality Commission can put in place a scheme to require employers with 50 or more employees to regularly report on their gender pay gap. Therefore, Irish employers should use this foresight and the UK experience to take steps to get their house in order in advance of the reporting obligations coming into law. Employers should review their existing pay practices and policies to identify and address any apparent gender bias or inequalities. Care is required in how this information is gathered, both from a data protection perspective and having regard to the potential for the use of the raw data in later claims. However, forward-looking employers with little or no gender pay gap can use this information to promote themselves as progressive and inclusive employers in order to attract and retain key talent, both male and female.
This document has been prepared by McCann FitzGerald LLP for general guidance only and should not be regarded as a substitute for professional advice. Such advice should always be taken before acting on any of the matters discussed.