Gender Pay Gap Reporting: More change ahead?

Only a few months since the deadline for publication of the first gender pay gap reports, the House of Commons' Business, Energy and Industrial Strategy (BEIS) Committee has called for the gender pay gap regulations to be strengthened, to increase their effectiveness.

Earlier this month, the BEIS Committee published a report on gender pay gap reporting, as part of its wider review into the gender pay gap in the private sector.  The report finds that, while the gender pay gap median is around 18 per cent nationally, in some organisations the gap is as wide as 40 per cent.  It also reports that 78 per cent of all organisations who have reported have gender pay gaps in favour in men.

Highlighting that the UK has one of the highest gender pay gaps in Europe and that closing it is not only in the interests of fairness and diversity but necessary to improve the country’s economic performance, the report calls for more to be done to close the gender pay gap.  Its recommendations include:

• Extending the reporting obligation to companies with 50 or more employees from 2020 (the regulations currently apply to employers with 250 or more employees).
• Requiring pay gap reports to include an explanation for any gender pay disparity (currently, such reporting is optional) and an action plan to tackle any gender pay gap against which employers must report progress each year.
• Amending the reporting regulations so that the current requirement to report on salary quartiles is changed to deciles, allowing for more subtle analysis.
• Publication of revised guidance to deal with ambiguous areas, for example on how bonus figures should be calculated.
• Giving the Equalities and Human Rights Commission specific enforcement powers, to impose fines for non-compliance.
  Requiring employers to report on pay gap data in respect of disability and ethnicity.

The current reporting regulations do provide for periodic review by the government in order to assess effectiveness but, with reviews set at five yearly intervals, it may be some time before the Committee’s recommendations are taken on board, if at all.

Gender equality was identified as a key issue in the Future Chemistry report we recently produced in relation to the workforce of the future.  If your organisation would be interested in attending Burness Paull's Future Chemistry events, discussing issues such as diversity and gender equality, please let me know (morag.moffett@burnesspaull.com).

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