It has been widely reported today that hundreds of companies have failed to meet the extended deadline to report their gender pay gap in accordance with (as appropriate) the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 or the Equality Act 2010 (Specific Duties and Public Authorities) Regulations 2017 (together “the Gender Pay Gap Regulations”).
The original deadline for gender pay gap reporting this year was 4 April 2018 for companies and charities with 250 or more employees and 30 March 2018 for public sector bodies with 250 or more employees.
On 5 April 2018, the Equalities and Human Rights Commission was reported to have confirmed that over 1,500 organisations had missed the original deadline and that it would be contacting those organisations to remind them of their legal obligations. It is therefore apparent that many organisations have still failed to comply.
What is the gender pay gap?
Average pay for women is less than that for men. According to the Office for National Statistics the gap for employees (including full time and part time) in 2015 was 19.2%. This is because a higher proportion of women work part-time, and part-time workers earn less per hour (regardless of gender), on average, than their full-time counterparts.
What are the gender pay gap reporting obligations?
Employers with 250 or more employees should be aware that they are obliged to publish six calculations showing:
- mean gender pay gap in hourly pay;
- median gender pay gap in hourly pay;
- mean bonus gender pay gap;
- median bonus gender pay gap;
- proportion of males and females receiving a bonus payment;
- proportion of males and females in each pay quartile;
every year within 12 months of the relevant snapshot date.
For listed public sector employers, the snapshot date is 31 March each year. This means the deadline for reporting is the following 30 March each year.
For private and voluntary sector employers, the snapshot date is 5 April each year. This means the deadline for reporting is the following 4 April each year.
Employers must publish this on their own website and through the government gender pay gap reporting website.
The Equalities and Human Rights Commission will investigate those organisations that fail to comply with the obligations and can apply for a court order requiring the organisation to remedy the breach and/or comply with amended obligations. If the organisation fails to comply with the court order, it can be punished with an unlimited fine. It is therefore possible that a number of organisations could be facing such penalties.
Employers should note that if they submit data that has not been calculated in accordance with the Gender Pay Gap Regulations, they will be in breach of the regulations and subject to enforcement action in the same way as those who publish no data at all. Whilst the Equalities and Human Rights Commission has indicated that it initially intends to drive up reporting by focusing on employers who do not publish any data, it has the means to identify employers who submit statistically improbable data and will consider taking action against them where it is reasonable and proportionate to do so.
It will be interesting to understand whether the failure to report is simply due to a lack of awareness of the legal obligations or whether this is in fact representative of the attitude of such organisations towards the issue of the gender pay gap in general. Whilst the former might be preferable, this seems fairly unlikely in view of the publicity surrounding the gender pay gap reporting obligations in the lead up to the deadline and the size (and therefore resources) of the organisations to which the obligations apply.
Rather than declining to publish data if there is a significant gap in pay, organisations would benefit far more from accompanying their data with an explanatory narrative to provide context. This may be extremely helpful in industries where there is a significantly larger proportion of employees of a particular gender.