Here is a useful article from our Business Support Helpline Partner, Croner, which will help you to understand what you, as an employer, should be thinking about in terms of gender pay and what you are required to do…
What is the difference between gender pay & equal pay?
The important thing to note about gender pay & equal pay is that while they are often perceived to be exactly the same thing, there is actually a difference.
The gender pay gap is the difference between the pay men typically receive in an organisation compared to what women earn.
Equal pay, on the other hand, refers to men & women being paid the same pay for the same work. Equal pay is a legal requirement, and failure to provide equal pay for equal work is punishable by law.
So, while gender pay looks at the overall view irrespective of roles, equal pay looks at role definition, equal level of responsibility and accountability, and ensures there is fairness, consistency and equality in the way all individuals are treated throughout the organisation.
What should I, as an employer, be thinking about in terms of gender pay?
All employers employing more than 250 staff need to submit their gender pay gap data.
If you are one of these employers you should be thinking about how you plan to present your data, and what the narrative you provide is going to be.
Remember, having a pay gap isn’t illegal, but failure to report your pay gap is. That’s why it is vital for you to provide your report before the 4th April (or 30th March for public sector organisations).
Unless you are one of the small number of firms reporting no pay gap, it would be wise to start thinking about what you can do to reduce your gap.
Currently, it’s not a legal requirement for firms employing less than 250 staff, but I would strongly recommend that organisations within that category start to think about it. Think about your current position and what you might need to do, as it won’t be long before the government make it a requirement for firms with less than 250 staff too.
What are employers required to do?
You are required to produce a gender pay gap report. You must submit that report on the government website, found by clicking here, and publish the report on your own website.
The report needs to present six separate pieces of information:
General Pay Gap:
- Mean – The average difference in the hourly rate of male and female full pay, relevant employees
- Median – The median difference in hourly rate of male and female full pay, relevant employees
Bonus Pay Gap: includes bonus, sales commission, recognition payment, stock awards and long-term incentives
- Mean – The bonus pay paid to men and women during the 12 months prior to reporting deadline
- Median – The median difference in bonus pay paid to men and women during the 12 months before the reporting deadline
Bonus pay proportion – Refers to the relevant male and female employees who received a bonus in the 12 months prior to the reporting deadline. This should be expressed as a percentage of all relevant male and female employees.
Pay Quartiles (upper, upper middle, lower middle, lower) – Ranking of employees from highest to lowest by hourly rate of pay. This list is divided into 4 even groups, and the split of men and women in each needs to be reported.
I would also strongly recommend you produce a textual narrative that supports the data you have presented. It paints a picture of the organisation and supports the data produced within that report. It is also an opportunity for the organisation to highlight year on year changes and improvement.
What do I do next?
That depends on the picture it paints of your current position. The best next step might be an equal pay audit. This will assess whether any discrimination exists in current practice.
Having a gender pay gap report and an equal pay audit together will help inform your next steps. You might decide to evaluate all of your roles.
To do this, we recommend an analytical job evaluation scheme which is unbiased and supports the requirements of equal pay legislation. This process will also underpin any pay benchmarking activity, whereby job roles are assessed in the comparable external market. This will allow you to identify any pay anomalies and put in place a plan to rectify them.
Speak to a Reward Expert
As part of your membership with the MIA you can speak to a Croner expert for help with any of the above issues and get free in-depth, tailored advice. Email firstname.lastname@example.org or call 01403 800500 for the exclusive Business Support Helpline scheme number.