So what’s this Gender Pay Gap all about?

What’s it all about?

Employers with 250+ people are now required to publish their pay data with reference to gender – in other words, disclose their Gender Pay Gap (GPG).  Pay equality and transparency is of course something to mostly be welcomed, but its introduction will bring with it a host of legal and financial headaches for employers.  Our Gender Pay Gap Audit & Advice service provides you wish the professional analysis, support and advice to deal with the risks and impact of this change on your organisation.

Did you know…?

  • In the year to April 2016 the average GPG for all types of employee in the UK was 18.1%. This is better than it used to be, but it remains stubbornly present, decade on decade.
  • For full-time employees in the UK the GPG is 9.4%.
  • For part-time employees there is a ‘negative’ GPG: part-time women are paid 6% more than part-time men.
  • The relative figures for the private and public sectors are 16.6% and 11.3%. The GPG has always been narrower in the public sector.
  • The average gap between full-time annual salaries for men and women is currently £5,732.
  • Ex-employees can make equal pay claims up to 6 years after they left you.
  • In the USA the average GPG is 20%.
  • The average GPG is 15.2% in France, 21.6% in Germany but only 7.3% in Italy.

How we can help

Our Gender Pay Gap Audit & Advice service can provide all the audit, data analysis and legal advice support that you will need for this process.

Our equal pay legal experts will work seamlessly with our equal pay audit partners at Smith & Williamson to:

  • crunch the numbers for all of your workforce pay and benefits
  • provide a detailed equal pay report
  • identify your GPG and highlight any areas of high risk
  • advise you on the legal risks and how to minimize them
  • support you in formulating an action plan for addressing the various risks

We also offer a simplified Gender Pay Gap Review, in which we can establish, at a much more basic level, what your headline equal pay position might be.

These services come with clear, transparent, fixed prices, depending on your number of employees.

For more information, prices or any questions you may have, please get in touch.

Why choose us?

  • Unlike accountancy firms and HR consultancies, our report will be protected by legal privilege because we’re a law firm. This means you can’t be forced to disclose it during any legal claim. That could be a critical advantage.
  • We believe our blended approach of a pay specialist and an equal pay legal experts working together to produce the Audit & Advice report is unique.
  • It will provide you with the best possible quality of report, covering all the pay, HR and legal angles.
  • Menzies Law is one of the UK’s leading specialist employment law firms – all of us are senior experts in our field.
  • Jane Baalam of Reward Risk Management is a leading equal pay, pay structure and job evaluation specialist, with vast experience over all sectors and all types of employer.
  • Our fixed prices are transparent and certain, taking account of your size.

Why act now?

An immediate pro-active approach is critical. You should immediately take steps to identify your GPG and the extent of your organisation’s vulnerability to equal pay claims, and take steps to tackle it. Once you have the data you then need to formulate plans, both immediate and longer-term, for ensuring that you phase out any GPG as quickly as you can.

Your GPG data will be available to all your workforce and beyond, and could create the following significant risks for you:

  • Disclosure of sensitive pay data
  • Damage to your employee relations and trade union relations
  • Impact on workforce morale, engagement and productivity
  • Significant cost of equal pay claims from current and former employees going back over many years
  • Reputational harm to your organisation through negative publicity
  • Impact on employee attraction, engagement and retention
  • Impact on your procurement bids, particularly public sector

So do please get in touch with us now to discuss your organisation and how we can help assess your GPG risk and work with you to reduce it.

What do employers need to do?

Audit

You should arrange for a professional equal pay audit of your workforce to be carried out. Elements to assess include basic pay, any variable like bonus or financial incentives, any enhancements such as shift pay, weekend pay or overtime, any allowances such as clothing, tools and travel time and any financial benefits such as PMI and insurance cover.

Data analysis

The results of the audit data need to be presented and studied carefully, by function, business unit and location. The unintentional inequity of some of some of your enhancements and fringe benefits, for example, might undermine the fact that your actual basic pay is itself fairly gender-neutral. Anything discretionary might be inequitable – you need to consider and test it. Historical changes can mean inequities become hidden in your policies.

Legal

You need to take advice on whether you have any legal defences to any GPG you may find, such as the ‘genuine material factor’ defence, which often works effectively. You may well need advice on whether different roles are ‘work of equal value’, which is where the majority of equal pay risk lies. High risk areas need particularly careful attention. You then need to prepare a legal strategy for dealing with any equal pay claims that are likely to arise, not only from current employees but from those who left you up to 6 years ago.

Relationships and communication

You need to prepare to answer difficult questions from your employees, customers, shareholders and other stakeholders. You may well need to rebuild trust with any staff who discover that they have been negatively affected by any GPG. You may need to review your employee engagement, morale and productivity levels.

Financial

You need to plan how you are going to fund any equal pay claim pay-outs – particularly the potentially large back-pay claims that can grow up over the years.

Where’s this all come from?

The legal requirement to ensure equal pay actually came into force in 1975 under the Equal Pay Act 1970, which was partly the result of an equal pay movement inspired by the 1968 Ford Dagenham sewing machinists’ strike. In the forty years since, the GPG has steadily reduced, but remains at a stubborn average of 19.1% in favour of men.

Equal pay law covers not only pay differentials within the same job role, but can in many circumstances require that pay rates are standardised across different functions for ‘work of equal value’. This has led to massive group claims in the public sector, where traditionally ‘female’ roles – such as cleaning and caring jobs – attracted lower rates than ‘male’ work found to be of equal value, such as maintenance and refuse collection roles. As the public sector claims run their course, claimant law firms are increasingly turning their attention to the private sector, where statistics show the pay gaps now tends to be wider.

In July 2015 the then Prime Minister, David Cameron, announced that, in order to force further change to remove the remaining GPG, mandatory pay data reporting would be required for larger employers. A voluntary GPG disclosure scheme, established in 2011, had been a failure.

“You can’t have true opportunity without equality. There is no place for a pay gap in today’s society and we are delivering on our promises to address it.”

David Cameron, July 2015

Since then, Theresa May’s government has continued in the same direction and shows every sign of increasing the amount of mandatory disclosure of pay information.

Get in touch

We’d love to talk to you, so please either call us on 0117 325 0526 or complete an Online Enquiry to start the conversation.