Nearly 400 HR professionals to gauge their thoughts on the new Government’s employment policies after the UK 2015 election, producing some revealing findings.

Nearly half (48 percent) are concerned about the administrative burden of mandatory gender pay gap reporting when it is introduced next year, with 26 percent concerned about managing equal pay litigation risks. Only six percent report their employer undertaking contingency planning ahead of the EU referendum, despite the potential impact of Brexit on the supply and movement of workers. 72 percent of respondents support the government’s aim that the new national Living Wage should reach 60 percent of average earnings by 2020 (more than £9 on current forecasts). Only 24 percent confirm their employers are responding to the new modern slavery and trafficking disclosure duty, with over three-quarters either unsure if they are responding or not planning to take any action. 

The study raised several concerns around the gender pay gap reporting duty, which is expected to apply next year to private and voluntary sector employers with at least 250 employees. As well as concerns around the administrative burden and equal pay risks, 27 percent were concerned about addressing pay gaps, 21 percent with managing internal communication on any gender pay gap and 17 percent were worried that misleading data may deter female job applicants. 

Martin Warren, Head of Eversheds employment practice comments: “Companies that do not engage with the new reporting duty run a serious risk of adverse publicity. They are likely to be easy to identify and unions, campaigners and the media are expected to name and shame those who try to keep their gender pay record under wraps, particularly in the case of well-known brands and those competing for work in the public sector. Defaulters may also attract attention from no-win no-fee lawyers seeking to generate equal pay claims.”

A new duty on businesses to publicly report steps they have taken to ensure their operations and supply chains are trafficking and slavery free is expected to be implemented in the UK before the end of this year. The duty derives from the Modern Slavery Act 2015. Despite being UK law, it has a global impact as larger commercial organisations, including those based abroad but selling goods or services in the UK, would also be caught. However, nearly three quarters of  those surveyed were either unsure if they would be responding to the requirement or not planning to take any action. 

Martin continues: “These results make disappointing reading for the Government but reflect our experience on the ground where a minority of organisations are already very active in this area but the majority are, at best, cautiously feeling their way. Competing priorities, a lack of funding and guidance, a failure to assign clear accountability for human rights within organisations and the complexity of modern supply chains are some of the challenges. However, it would be unwise for larger business operating in vulnerable sectors to ignore it, particularly those with particular brand sensitivities.” It was confirmed in the UK Budget that a “National Living Wage” will supplement the current levels of national minimum wage, with the stated aim of exceeding £9 per hour by 2020. The survey indicates that employers are generally on board with the changes, with 72 per cent of those questioned expressing their support. Surprisingly, and a reminder that many employers pay in excess of the minimum wage, it was generally felt that the National Living Wage will have little overall impact, with 71 percent of respondents expressing this sentiment.

Martin continues: “There has been much in the press concerning the potential impact of the increased national minimum wage or “National Living Wage”, as it has been termed, upon recruitment. For example, employers struggling to meet the higher rate of pay may be considering focusing attention upon younger workers, for whom the hourly rate is clearly lower. Employers nonetheless need to be wary of doing so if the sole motivation is economic. UK discrimination laws require that employers do not discriminate on the grounds of age when it comes to recruitment, whether disadvantaging younger or older workers. It is important, therefore, that employers continue to focus on the needs of the organisation and can demonstrate recruitment selection based upon the best person for a particular role, not their age or cost. In any event, younger workers won’t stay young forever and once they reach the age of 25 they will qualify for the higher rate of pay. Someone dismissed because they qualify for the higher minimum wage rate will be able to claim compensation for unfair dismissal and, potentially, age discrimination.” Martin concludes: “With a raft of more immediate employment challenges, it comes as no surprise that nearly all employers surveyed have yet to prepare for the EU referendum. However, we expect this to change as employers begin to focus on the significant issues raised on both sides of the referendum debate as campaigning gains traction.”