Here’s a tale of what not to do with your gender pay gap (GPG) figures – especially if any medium/large employer was hoping that they might be able to either bury their GPG away quietly or put out some false statistics.
For the last year I have been regularly saying to clients and at conferences that there is nowhere to hide and that journalists and researchers will be all over everyone’s published GPG figures like a rash. But I must admit I wasn’t expecting this to be made so starkly clear so early on, or by such an august institution as the Financial Times.
In the last few days the FT has reported that 16 of the 300 or so employers that have so far reported their GPG have submitted 0% gaps (that’s 0% for both the mean and median) that were therefore “statistically improbable and therefore almost certainly inaccurate”. These included a car parts manufacturer, a McDonalds franchise, a branch of the charity Age UK and the UK branch of the German fashion retailer Hugo Boss.
It is not completely impossible to have a GPG that is 0% for both the mean and median, but it would certainly require highly unusual circumstances for a 250+ employee organisation. Even if pay is fair and equal in both legal and moral terms between the sexes in a business, in almost every case women tend to do the majority of lower-paid roles and men tend to predominate in the higher-paid roles, leading to at least a small GPG.
So even though one of our own clients was pleased to report a (genuine!) 0% median GPG (helped a great deal by around 60% of its employees in every pay quartile being female), I still salute the FT in highlighting this as an issue worthy of investigation.
One of those employers highlighted by the FT, Hugo Boss, has subsequently made its position much, much worse and probably harmed its reputation significantly in some quarters. In what will surely be setting the bar for quite some time in terms of a GPG omni-shambles, Hugo Boss originally published a 0% GPG. Then, perhaps following the first FT article having drawn attention to this, it subsequently republished its figures, showing that it had a 76% median GPG. Yes, that’s right – it went from 0% to 76%.
Now, that would make sense if Hugo Boss had been trying to hide what it realised was a horrific pay gap and was then forced into admitting the truth. But a day later it seemed to make things even worse by… wait for it… republishing its GPG figures yet again, this time claiming to have only a 4.7% median GPG.
Where do we begin…? Well, one thing is for certain and that is that I believe the 4.7% figure even less than I might be willing to believe their earlier figures. Surely every ounce of credibility for Hugo Boss’s figures being in any way accurate has by now been lost? And I can imagine that they might well be first on the hit list for the Equality and Human Rights Commission (EHRC) to investigate.
This debacle reminds us that, although there is no fine or other immediate legal penalty for an employer which does not publish and report its GPG, it is still very much a legal requirement to do so. The reality is that such a failure is likely to be noticed and the employer probably held up to public scrutiny and is more or less guaranteed to suffer reputational harm.
Who knows what would happen if the EHRC were to decide to pay a visit? You also have to speculate whether HM Revenue & Customs might also fancy a visit to any employer who refuses to publish and report, on the basis that if the employer was either incompetent or refusing to comply with the law in this respect, then what else might they be doing in terms of their compliance with tax and accounting practices?
You will also forgive me (hopefully) if I also suggest that, if Hugo Boss’s GPG disaster is just the result of mistakes or incompetence, their situation highlights the benefits of having experts like us at Menzies Law come in to calculate your GPG statistics for you, to ensure that they are both accurate and calculated in accordance with good practice and industry norms.
And if you’ve already calculated them but would like us to check them for you, we’d be delighted to do so.
email Luke or call 0117 325 0921
Categories: Employment Law