In April 2018, all UK-based public-sector bodies, companies and charities with more than 250 employees were required to report their gender pay gap. What does the data reveal so far about the UK’s gender pay gap, and what are the consequences of failing to report?
The new requirement to publish information on median earnings came into force last April, as part of a change to the Equality Act 2010. It requires affected companies to publish information on the following:
- The variance between average hourly earnings between men and women across all positions within the organisation
- Differences in bonus payments
- The percentage of men and women at various levels of the pay structure
It is important to note that the hourly earnings variance is based on the median hourly pay gap (i.e. it calculates the average of all hours worked by men and women in an organisation, regardless of whether this work is full-time or part-time).
As a result, the figures do not provide information on whether companies are paying men and women equally for performing the same role, though it is worth noting that this type of pay discrimination has been illegal since the 1970s.
Here are some of the key points that businesses need to know about the gender pay gap reporting deadline:
The gender pay gap reporting obligation affects about 9,000 organisations in the UK, which collectively employ over 15 million people.
There is a significant gender pay gap in the UK
The figures disclosed so far reveal that, on balance, 78% of companies pay men more than women, with the result that the national median pay gap is 18.4%. As a result, the UK ranks worse in terms of its gender pay gap than the OECD average, which is 14%.
Not all sectors are equally affected
While the majority of sectors pay men more than women on average, there are a few sectors (namely water and waste, household employees and mining) which actually pay women more.
Meanwhile, several high street chains such as Costa, McDonalds, KFC and Starbucks reported no gender pay gap.
The worst affected sector is finance and insurance, where about 35% of firms pay men more than women. Companies like Virgin Money and Royal Bank of Scotland, for instance, have gender pay gaps of 38.4% and 36.5%, respectively, in favour of men.
Some have missed the boat
As at Friday 6th of April, just over 10,000 companies have released gender pay gap figures. However, more than 1,500 companies have missed the deadline, prompting the Equalities and Human Rights Commission (EHRC) to urge them to publish the required data within 28 days.
Consequences of failing to report
Organisations who fail to report their gender pay gap figures risk being investigated by the EHRC. Penalties for non-compliance can include an unlimited fine, though the EHRC is also considering ‘naming and shaming’ companies.
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