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In focus – gender pay gap reporting

Carolyn Brown
gender pay gap

The Business, Energy and Industrial Strategy committee published its report on gender pay gap reporting. Contributor Carolyn Brown, Employment partner and Head of Client Legal Services – RSM.

The committee made several proposals to change the reporting requirements. Including; requiring all employers to publish alongside their figures, a narrative to explain them and an action plan for closing the gap; reducing the threshold for reporting after next year to all those employers with 50 employees or more; and clarifying the sanctions the Equality and Human Rights Commission can impose on those who fail to comply.

The report notes that while the median pay gap across the economy is 18 per cent in favour of men, at an organisational level, the new figures reveal some alarming truths: with gender pay gaps of over 40 per cent not uncommon in some sectors and 78 per cent of organisations reporting gender pay gaps in favour in men. New analysis by the Business Committee finds that 1,377 employers (13 per cent of the total) have gender pay gaps in favour of men of over 30 per cent.

The Committee notes that only around half the members of the UK workforce are expected to be covered by the present reporting requirements. Recognising evidence that the pay gap is higher in smaller businesses, the report calls on the Government to widen the net of organisations required to publish gender pay gap data to those with over 50 employees (from the current 250).

Carolyn Brown, Employment partner and Head of Client Legal Services at RSM, said ‘It is unsurprising that the results have yielded significant gaps in favour of men in many sectors.  As we approach the second deadline for reporting, it will be interesting to see how those employers have fared in reducing the gap. Larger businesses need to be implementing their strategy to close the gap now, since the third snapshot date is fast approaching in Spring next year after which organisations’ progress in closing the gap over the first three reporting years will be scrutinised.

‘Considering half of the working population were not included in the first round of published figures, one can certainly see the need for reducing the reporting threshold if we are to make real progress in closing the gender pay gap.

However, Government must balance this against the regulatory burden weighing heavily on the shoulders of SMEs and medium-sized employers.  The reporting exercise requires considerable resource which isn’t readily available to those businesses.  That lack of resource may lead to reporting irregularities, distorting the true figures and potentially placing a greater burden on the EHRC in its efforts to establish compliance.’ The report follows the recent announcement that all 10,000 employers the Government expected to have to report their gender pay gap figures have done so.

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