It's important to distinguish between equal pay and the gender pay gap: equal pay is defined as men and women receiving a different pay for carrying out the same role, whilst the gender pay gap relates to a certain disparity between the earnings of men and women, irrespective of their roles.
For example, in a company where there are more men in senior roles than women, it could be said that there is a gender pay gap. To give an example of equal pay issues, we could look at the ongoing Asda case whereby shop floor workers (predominantly women) are paid less than workers in the distribution centres where the work force is largely male. It is argued that the roles do not differ and therefore, the pay shouldn’t either. This has brought about one of the largest private sector equal pay claims and the penalties could amount to £100m for the store.
It can be said of both equal pay and gender pay gaps that the main objective is to eliminate sex discrimination in relation to pay and to increase transparency where the different pay of men and women is concerned.
Gender pay gap reporting will be a subject that all large private and voluntary sector employers will have to become acquainted with. It will now be a reporting requirement for large employers to publish certain figures in relation to gender pay gaps. This reporting requirement will only apply to employers with 250+ employees meaning they will have to publish the overall % different in mean and median pay between men and women.
In addition to these details, employers will also have to publish the following:
- Gender bonus gap
- The proportion of men and women receiving a bonus
- The proportion of men and women working at each quartile of the organisations pay distribution
Contrary to equal pay requirements, there are no monetary sanctions for failing to publish gender pay gap reports, however, business leaders must be aware of reputational ramifications this may have for them, especially in relation to potential employees.
While employers will not need to produce a report until April 2018, many realise that a "dry run" will give them the opportunity to address any problem areas, and allow HR leaders to highlight to the executive team any reputational risks.
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