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19 February 2016

Preparing for gender pay gap reporting – advice from Eversheds

Sensible advice, as always, from Eversheds, on how to prepare for the introduction of the regulations on gender pay gap reporting. The advice is aimed squarely at financial institutions.

For the Eversheds briefing on the proposed regulations, click here.

12 February 2016

Gender pay gap reporting regulations published

A second consultation paper on gender gap reporting has been published today, together with the Government’s reply to the more than 700 responses to the original consultation.

You can find the consultation document here, and the Government’s reply to previous responses here.

In brief, the Government proposes that:
  • The regulations will come into force on 1 October 2016. Employers with 250 or more employees will be affected. A relevant employee is one who works in Great Britain and whose contract is governed by UK legislation (regulation 1).
  • The definition of pay will be consistent with the definition of pay used by the Office of National Statistics (ONS) for the Annual Survey of Hours and Earnings (ASHE). Pay includes basic pay, paid leave, maternity pay, sick pay, area allowances, shift premium pay, bonus pay and other pay (including car allowances paid through the payroll, on call and standby allowances, clothing, first aider or fire warden allowances). It does not include overtime pay, expenses, the value of salary sacrifice schemes, benefits in kind, redundancy pay, arrears of pay and tax credits (regulation 2)
  • Employers will have about 18 months after commencement to publish the required information for the first time and must then publish annually thereafter (regulation 3).
  • Employers will have to publish their overall mean (regulation 4) and median (regulation 5) gender pay gaps.
  • Employers will have to publish the difference between the mean bonus payments paid to men and women (regulation 6).
  • Employers will have to report on the number of men and women in each quartile of their pay distribution (regulation 7).  
  • Employers will have to provide a written statement confirming that the information is accurate (regulation 8). Employers must publish the information in English on their searchable UK website that is accessible to employees and the public. Employers will be required to retain this information online for three years. In addition, employers will have to upload the information to a government­ sponsored website (regulation 9).
The government will review the workings of these regulations within five years of their commencement (regulation 10).

Moves to introduce gender pay gap reporting were first mooted by the then Labour government in 2010, revived by the Coalition in 2014, and a consultation initiated by this government in 2015. The 18 month lead-in period suggests that this promise now looks to be undeliverable, but, if enacted in the form proposed, the regulations will mark a step change in action to tackle the gender pay gap.  

11 February 2016

Minister previews second consultation on gender pay gap reporting

Speaking at yesterday’s Trailblazing conference for companies signed up to the Think, Act, Report initiative, the Rt Hon Nicky Morgan MP, Education Secretary, and Minister for Women and Equalities said:
Rt Hon Nicky Morgan MP
 “ . . . more and more companies are already publishing gender pay information.
We have been learning from those who have already published. Like Tesco, who publish a median gender pay gap, Deloitte who publish a mean gender pay gap and Mitie who publish the numbers of men and women working at different pay bands.
And we have been testing what works using real employee data – because we want this to work in the interests of employers as well as employees  . . .”
Morgan said that the full details of these regulations would be announced very shortly in the form of a second consultation on the draft regulations themselves. If there is to be a second consultation – and we have known all along that there would be, then the actual content of the regulations is still far from settled.

You can read the full text of the speech here.

10 February 2016

Estimating the gender pay gap

In this article in the February 2016 edition of Equal Opportunities Review I consider the implications of the independent review of UK economic statistics, and argue that there is still time for the review committee to include the gender pay gap in its final findings. 

You can access the full article here. 

MEPs call for new gender equality strategy

The European Commission must table a communication on a new strategy for gender equality and women’s rights 2016-2020 as soon as possible and deliver on its political commitments, say MEPs in a resolution voted on Wednesday. The communication should address gender equality issues, including the gender pay gap.

MEPs say that the previous Commission strategy (2010-2015) was not comprehensive enough to boost gender equality at European and international levels and that a new strategy should provide new impetus and deliver concrete action to strengthen women’s rights and promote gender equality.

Committee to question Ministers Nicky Morgan and Nick Boles

The Rt Hon Nicky Morgan MP, Education Secretary
and Minister for Women and Equalities
As businesses and their employees await the Government’s proposals for gender pay reporting requirements,  Women and Equalities Committee Minister Nicky Morgan and Skills Minister Nick Boles will this morning be questioned by the Women and Equalities Committee in the final session of the Committee’s gender pay gap inquiry.
The evidence session will begin at 10.30 am and you can watch it here.
Areas of particular interest to the Committee include:
  •      Finding out the Government’s response to evidence the Committee has heard on the impact of gender pay gap reporting regulations, the details of which are expected imminently.
  •     What action the Government is taking to tackle the gender pay gap for women over 40.
  •     What plans, if any, the Government has for ensuring that the skills of women over 40 are fully utilised.

     Committee Chair Maria Miller said:

"The Prime Minister’s commitment to eliminating the gender pay gap in a generation is clear but the Committee is concerned that the policies to bring about this change are not clear and may not be adequate. We want to find out what new policies the Government might be considering and why they think gender pay gap reporting can address the structural issues many women face in accessing employment. In particular we want to investigate how Ministers plan to reduce the pay gap where it hits hardest – amongst women over the age of 40."

The Committee will question Nicky Morgan and Nick Boles about the Government’s plans to close the gap for women over 40, with a particular focus on the potential economic gains, on better provision for women returners, flexible working, and better provision for carers.

9 February 2016

Trailblazing transparency

In Trailbazing Transparency, the most recent report to come out of the Think, Act, Report Initiative,  which summarises the latest thinking from business and government on the gender pay information that employers will have to publish and  best practice for reporting, Deloitte sets out its support for the Prime Minister’s proposals to require larger employers to publish their gender pay gap.
David Sproul
Deloitte has published its 2015 data in its annual Impact Report. Deloitte’s CEO, David Sproul, says:
“We must be open and transparent about the gender issues that face our business; reporting our gender pay gap was a way we could achieve this. Our gender pay gap results did not surprise us, instead serving to confirm what we knew – that the challenge for us as a business is increasing the number of women we have at senior levels. When we look across our organisation as a whole our gender pay gap stands at 17.8 per cent (around 1.3 per cent below the national figure); however, the pay gap between male and female employees at each grade is significantly lower, at 1.5 per cent on average.”
Sproul goes on to outline some of the initiatives Deloitte has in hand to improve the position of women in the company.
On bonuses, Trailblazing Transparency says:
“Over £42 billion was paid out in bonuses in 2014-15, so they constitute a significant form of payment for UK employees. If we are serious about closing the gender pay gap, it is important that we consider bonus payments as well. According to the Chartered Management Institute (CMI) male managers are still more likely to get a bonus than female managers. These findings are especially concerning as women still only make up around 34 per cent of senior managers. We also know that the EHRC’s 2009 inquiry into sex discrimination in the finance sector found that differences in bonuses awarded to men and women significantly contributed to the pay gap. Bonuses in the finance sector can form a substantial part of an employee’s remuneration; the average bonus across all those in employment last year was approximately £1,500 per employee, compared to an average of £13,500 in the finance and insurance industry.”
The report does not say what should be done about this.
The report contains some useful graphics and is packed with case studies from companies who are signed up to Think, Act, Report. PWC and Deloitte are to be congratulated on being the only contributors to have processes in place for reporting on their gender pay gaps.

2 February 2016

Black workers earn less than white workers

Black workers with degrees earn 23.1% less on average than white workers with degrees, according to new analysis published by the TUC.

The analysis of official statistics shows that a black worker with a degree will earn £14.33 an hour, on average. However, a white graduate will typically earn £18.63 an hour – £4.33 more.

The findings reveal that the pay gap between white and black workers is at its widest at degree level. Black workers with A-levels earn 14.3% less on average than their white counterparts. And black people who leave school with GCSEs typically get paid 11.4% less than their white peers.

The pay gap between all black, Asian and minority ethnic (BAME) workers with degrees and white graduates is 10.3% - the equivalent of £1.93 per hour.

The pay gap with white workers for all groups, regardless of their educational attainment, is 5.6% for BAME workers and 12.8% for black workers.

These figures highlight how inadequate are the measures to tackle the gender pay gap currently being proposed by the Government. As EqualPayPortal’s response to the consultation on gender pay gap reporting said:

The fact that the focus of the measure is solely on gender will reduce its effectiveness in getting employers to take action. While research has shown that in respect of labour market disadvantage, gender ‘trumps’ other protected characteristics [EHRC, 2009], it is nonetheless still the case that the gender pay gap cannot be addressed fully without also taking into account ethnicity and, as this present consultation partially recognizes, age. A measure focused solely on gender may result in some important aspects of the gap being overlooked.

The ethnic pay gap is both an important issue in its own right, and a contributor to the gender pay gap. It needs to be tackled.