Under The Spotlight: The Gender Pay Gap

If asked, employers will most likely try to distract by discussing the policies they have in place for diversity, support for new parents and other schemes that benefit their employees. However, this is all about to change.

The new legislation

New regulations coming into force on 6th April 2017 will require companies with over 250 employees to keep records of the salaries and bonuses. The Gender Pay Gap Reporting legislation will highlight the differences between the remuneration of employers’ male and female pay, and support research that has found that currently men are more likely to receive a bonus than their female colleagues.

From today these companies will need to have the information readily available to publish:

• Their gender pay gap
• Gender bonus gap
• The ratios of men and women in each of the four pay segments (quartiles)
• A breakdown of how many women and men get a bonus

These results must be made public on the company website, and a government site within 12 months and must remain online for three years. The idea is that pay practices will be exposed which will create pressure on employers to close the gap. The theory is that this will contribute towards creating an equal workplace for both genders.

What effect is this going to have?

The new legislation will most likely encourage the decisions around pay to be more transparent, and less likely to be kept close to the chest of the board or upper level management. Research points to the fact that although the majority of women (75%) are more likely to move jobs in order to achieve a higher salary rate, they feel uncomfortable when negotiating a higher wage package.
Interestingly, statistics that are currently collected suggest that the gender pay gap is relatively narrow between men and women in the under 40 age bracket. However, beyond that bracket the gap widens, presumably because of the care obligations that are more likely to fall to women.

Employers will be forced to take an introspective analysis of their own procedures around salaries and bonuses, to take the new legislation into account. There will be an additional administrative burden on employers who will have to collate and store the information, whilst data protection are safeguarded.

Potential recruits will no doubt use this information to help them make decisions during their job search – if they’re left dissatisfied then they may choose to look elsewhere. Existing employees too will benefit, and can negotiate better payment terms, should they fall below the level of their colleagues in the same quartile.
It is important to note that the gender pay gap is different to the concept of equal pay. Equal pay compares the salary of men and women doing the same or similar work, whereas the gender pay gap focuses on the disparity between men and women across the whole of an employer.

Nevertheless, with information readily available employees, will be empowered to exert internal pressure on an employer with a wide gender pay gap.
There will be some Employers who face uncomfortable truths over the next twelve months However, over time the Gender Pay Gap Reporting legislation will facilitate a narrowing of the gender pay gap.

Contact our employment law solicitors
For further information about protecting your business, contact employment law solicitor Amy Cousineau Massey or call Steele Raymond Solicitors on 01202 294 566.