Gender Pay Gap Reporting – Are We Doing Enough?
This disparity between the sexes is having a knock-on effect on firms’ gender pay gap data with some financial services employers having reported an average pay gap of around 50% for wages and significant discrepancies in respect of bonuses. Other companies are reporting equally bad, if not worse, figures.
It has become clear in recent days and weeks, with the publication of firms’ gender pay gap data, that we are at something of a crossroads. Gender pay gap reporting, in and of itself, will not bring about the wider cultural and societal shift needed in order to remedy pay disparity between the sexes completely. However, it has shone a harsh spotlight on those firms with poor internal practices, and the public scrutiny of these businesses could be a catalyst for real change.
Understanding what your employer’s gender pay gap data means for you has never been more important.
No. Unequal pay is when two employees are doing the same job, or similar jobs, or work of “equal value” within an organisation, but are paid different amounts for doing so. Unless an employer can show that the reason for this is due to a genuine, material factor which is not related to the sex of the employees in question, then paying them different amounts will be a breach of equality legislation.
The gender pay gap is another matter. It refers to the difference in pay between men and women within an organisation, irrespective of their jobs.
No. Companies can pay individuals who are doing the same job, or similar jobs, or work of “equal value” the same amount, and still report a gender pay gap.
If there are more men than women employed in senior roles within a business (and therefore more men than women attracting higher wages and bonuses, for example), then a business may report a gender pay gap in favour of men.
However, this does not necessarily mean that female employees within the organisation are paid unequally, as compared to their direct male peers.
In order to make sense of your employer’s gender pay gap report, it is important to appreciate the nuances of the data contained within it.
Your employer’s gender pay gap report will not tell you if you are being paid un/equally for doing the same (or a similar) job as your colleagues. However, it may enable you to make a basic assessment as to whether or not you might be. It may help you spot patterns which could or ought to be challenged.
For example, if there are a significant number of women in the lower quartiles of your employer’s gender pay gap data, but far fewer in the upper quartiles (i.e. in the more senior parts of the business), you may want to ask why that is the case . Why is it that a smaller proportion of women are being represented at management level, when there are so many at the junior end? Is this because women are simply not applying for more senior roles within the business or do not have the requisite skill set to move through the ranks, or is it because their career progression is stalling for some other reason?
Alternatively, if your employer’s data shows that it has more women in each quartile of its pay structure, and yet 80% of men within the business received a bonus as compared to only 40% of women for example, again, you may want to ask why. After all, if women are “overrepresented” as compared with men, the bonus figures might be expected fall in their favour.
It may be that your employer’s data indicates that your company has got the pay balance about right as between the sexes. Alternatively, it may indicate that there is an equal pay or sex discrimination issue which warrants further investigation.
Currently, the gender pay gap in the UK across full-time and part-time employees is 18.4%. There are a variety of reasons why this is the case. Some of the main contributing factors are:
If you are concerned that your employer’s data suggests it is paying one gender more than the other, you may want to:
Depending upon the circumstances, you may want to ask your line manager or HR why you did not receive a bonus last year, when some of your peers did.
There may be genuine reasons for this (for example, if your performance was not up to scratch, or if your area of the business did not meet bonus targets or satisfy performance matrices, or if you were not eligible for a bonus because you joined (or left) your employer partway through the financial year).
If, having raised your concerns, you do not believe there were fair reasons to deprive you of a bonus, you may want to consider submitting a grievance in accordance with your employer’s Grievance Policy and exploring the matter further. You could begin the process with an “informal” grievance, before it is escalated to the “formal” stage (if necessary).
Partnerships are not currently under a legal obligation to include partner statistics within their gender pay gap data. This is because partners’ remuneration is calculated differently to employees’ pay, so is considered not directly comparable. For example, partners take a share of their firm’s profits (known as “drawings”). The share is sometimes determined in whole or in part in accordance with a “lock step” mechanism commonly based upon longevity in the partnership. Employees, on the other hand, receive a regular, fixed, salary which is typically paid on a monthly basis.
There have been calls from a number of commentators and MPs for partner statistics to be included in firms’ gender pay gap reports. On the face of it, it seems counterintuitive that a group within society which is generally very highly remunerated and very male dominated is not included within the data, given that the whole purpose of that data is to promote transparency of pay and equality between the sexes.
Following adverse publicity in this respect, some law and accountancy firms (all of the Big Four accountancy firms in the UK, for example) have recalculated their gender pay gaps and are self-reporting partner data. It may be that the regulations are amended in due course, to require firms to report partner data either alongside, or separately from, employee data.
In the meantime, whatever the legal requirements, it looks like we may see more firms self-reporting. Arguably, firms will want to be seen to be in the vanguard of this process, rather than producing statistics only when forced to do so.
Partner and Head of Department
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