suits with heads in sand

Don’t stick your head in the sand with the gender pay gap report

Due to the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017, all companies with more than 250 employees must publish a gender pay gap report by April. This has been a hot topic in the news as more and more large corporations reveal the pay statistics and gaps between their male and female staff. Many companies are finding this an overwhelming task, not so much because of the extra time it requires to put together, but because of the potential implications of publishing their reports. However, some prior preparation and planning can go a long way in helping you navigate this report and all that might follow.
A gender pay gap does not mean a difference in the salary that men and women receive in the same role – that is called equal pay and is a legal requirement in the UK. The gender pay gap is the difference in the mean and median pay across the organisation.
The information you will need to publish is:
1. The difference in the mean hourly rates of pay for males and females
2. The difference between the median hourly rates of pay for males and females.
For a simple example, it might be that a company’s senior positions are occupied largely by men, whereas the more secretarial roles are held by women. In this scenario, the gender pay gap is likely to be quite wide because the hourly pay would differ greatly between the top positions, regardless of gender. However, companies will not be able to get away with that explanation so easily. Such an explanation would raise a further question that has also recently been circulating news headlines – the heavy statistical preference to men over women in senior positions.
How are you to navigate this new requirement of reporting their gender pay gaps?
Here are 5 things to consider:

1. You will need to publish the data on your website

First things first, do you have a website? With over 250 employees in the company, this is hopefully not something you need to worry about. However, you do need to consider how you will present your findings. It is one thing to have all the data, but you need to have a strong plan in place for how you will communicate that to your stakeholders. You are also required to publish the report on the government site for gender pay reporting.

2. Leaving it for another month might be too late

Don’t leave this to the last week of March. If you are concerned about the potential findings and their implications, making this a priority gives you extra time to think about how to address the findings. Sharing the gender pay gap report with a clear plan of action for how you will deal with it will give you a softer landing with your stakeholders. It will also help you feel more confident and in control of making the changes, rather than swept up in the wake of your findings.

3. The 5 Whys

The 5 Whys is a technique used in the Analyse phase of the Six Sigma DMAIC methodology which is extremely useful when analysing your gender pay gap – or any other statistics in your company. Don’t be afraid to ask “Why?” And don’t just ask once and give yourself and others a superficial explanation along the lines of “We just have more men in top positions, that’s it.” That may be the first thing you notice, but ask yourself another why. Why do we have more men in top positions? Now you’re getting somewhere. Question the answers you give five times. This will help you develop a clear action plan and it will help you communicate the situation and the proposed solutions with more confidence and clarity.

4. Part-time and job-share employees and workers also count

You might be used to thinking of part-time or job-share employees as 0.5 employees, but for gender pay reporting purposes, they count as a full employee. However, agency workers will form part of the headcount of the agency that supplies them, and not the employer they are on assignment to. Going over the employee records will be useful, because if you have been accounting for part-timers as 0.5 employees, your figures will be inaccurate for the purposes of this report.

5. Bonuses count too

While that may not be the natural conclusion you would draw from the term “Gender Pay Gap”, you are required to include a breakdown of all pay related to performance, commissions, profit-sharing and the like. You don’t need to include overtime pay or pay in lieu of annual leave. However, if a bonus paid relates to overtime work, it must be accounted for in the report.

If you would like more clarity on how to best go about this report, we can help you

This is not a comprehensive list of considerations, nor is to be seen as direct legal advice. There are many more things to consider that have not been covered in this article. Should you require legal advice on these matters and how to navigate them, or any other employment-related issues, please don’t hesitate to get in touch with our team at My Business Counsel and we will be happy to help. If you are dissatisfied with your company’s gender pay gap report, we can help you devise a diversity plan to guide you in navigating the complex web of discrimination and employment laws.