Getting ahead in tackling the gender pay gap

On 2 August 2018, the House of Commons’ Business, Energy and Industrial Strategy (BEIS) Committee published a report on gender pay gap reporting. It is the first output of the Committee’s inquiry into aspects of executive pay and the gender pay gap in the private sector, launched in March 2018.

The report finds that in some organisations the gender pay gap is as wide as 40%, while the median gap is 18% nationally. The report calls for more to be done to close the Gender Pay Gap.

The report makes a number of recommendations:

• Reporting obligations to extend to companies with 50 or more employees from 2020.
• A mandatory narrative explanation for pay disparity, accompanied by an action plan to close the gender pay gap (currently the narrative is optional).
• Partner remuneration to be included.
• The current requirement to report on salary quartiles should be changed to deciles (in effect allowing for a more nuanced analysis).
• Clarify current areas of ambiguity and publish revised guidance dealing with ambiguous areas, for example, on how bonus figures should be calculated.
• The Equalities and Human Rights Commission to have specific enforcement powers, to levy fines for non-compliance.
• Company boards, investors and regulators to drive change in tackling the gender pay gap.

Private sector employers should ensure there is ongoing annual compliance with the Gender Pay Gap reporting obligations, taking account of any future calculation changes.

Employers with between 50 – 250 employees might like to consider their Gender Pay Gap position now, in order to be ready for possible changes in 2020.  This could be an opportunity to put their house in order before they are obliged to comply with the Regulations.