What’s the story with gender pay gap reporting?
It is unlikely that anyone is not broadly aware of gender pay gap reporting. Since the introduction of the regulatory requirement in 2017 (the Government’s initiative to increase awareness and improve pay equality), there has been a great deal of attention around results published with high profile cases of gender pay disparity.
The reporting requirements
Gender pay reporting legislation requires employers with 250 or more employees to publish statutory calculations annually (31st March for public sector organisation and 5th April for private and voluntary sectors), showing what the pay gap is between their male and female employees. The scope and definition of employees includes zero hours, apprentices and employees based overseas if they have an employment contract subject to English, Scottish or Welsh law. Agency workers are excluded as it is expected that they would be included in any reporting required by the agency they are contracted to. Employees on reduced rates of pay while on maternity leave or sick leave are excluded from the calculations.
There are six calculations that employers will report on:
- The mean gender pay gap
- The median gender pay gap
- The mean bonus gender pay gap
- The median bonus gender pay gap
- The proportion of males and females receiving a bonus payment
- The proportion of males and females in each quartile band
Employers have the option to provide a narrative with their calculations and can include the reasons for the results and give details about actions that are being taken to reduce or eliminate the gender pay gap.
Gender pay reporting verses equal pay
The gender pay gap shows the difference in the average pay between all men and women in a workforce. Equal pay refers to the pay differences between men and women who carry out the same jobs, similar jobs or work of equal value.
The latest release from the Office for National Statistics indicates an optimistic trajectory towards the demise of gender pay disparity, with the pay gap falling for full time employees from 10.5% in 2011 to 9.1% in 2017.
However, there is still work to be done as the results show that on average men are paid more than women. The gender pay gap is entirely in favour of men for all occupations, however, what is encouraging is that occupations with the smallest gender pay gap have almost equal proportion of men and women.
When considering age groups, the gap for full-time workers is not significant at younger ages. The pay gap widens from age 40 onwards.
Men who have worked for over 20 years in the same organisation earn 20.8% more compared with those men who worked for no longer than one year. In the case of women, pay is 17.5% higher.
Men working in chief executive and senior official roles earn almost four times more than men in elementary occupations, in the case of women, pay is 17.5% higher.
Factors relating to occupation (i.e. job role and profession) has the largest effect as it contributes to 23% of the gender pay gap disparity between men and women. This includes findings relating to pay disparity in the highest paid occupational group (chief executives and senior officials) and occupational groups that are heavily skewed towards either men or woman (for example, women make up 67.7% of the administration and secretarial occupational group).
There is no one size fits all solution to this given the multifaceted determining factors contributing to the current picture.
Initiatives to attract and retain women in management and executive level roles is one of the key action points to support future results. Encouraging flexible working practices is identified as a practical solution to shift the balance – women predominately take on childcare responsibilities and therefore flexible working schemes can facilitate career opportunities and talent management activities. Unequal sharing of care responsibilities contributes to a higher proportion of women taking part-time work, which is generally lower paid.
The current uptake of the highly topical shared parental leave by men has been low, predominately due to the financial implications involved. As such, a wider review of employers’ family friendly policies, including enhancements to shared parental leave is recommended where financially viable for employers.
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