In the heady days of the Coalition Government, gender pay gap reporting started to get some traction on the political agenda. This led to the 2011 initiative ‘Think, Act, Report’ which encouraged employers to voluntarily publish gender pay gap information. According to a Guardian article in August 2014, citing a parliamentary question from the shadow Equalities Minster at the time, 200 companies signed up to the initiative but only four of those ever published any data. £90,000 of public money later and we were clearly no further on.
So will the Government’s latest Regulations, fresh off the press, have a more significant impact? Well on the basis that four is not hard to beat, probably.
On publication of the new draft regulations, the UK Government has asked one final consultation question: “What, if any, modifications should be made to these draft regulations?”
Where do we start?
Gender pay gap reporting was always going to be tricky, as statistics are slippery things that can be used for good and evil, as we all know. The draft Regulations require employers (both public and private sector) with 250 or more employees to produce statistics and information regarding the gender pay gap of their workforce on an annual basis, starting from April 2017.
The information has to be presented in quartiles, detailing the number of men and women in each of the four quartiles and the overall pay range (and therefore gap) for each quartile. The consultation paper is keen to point out that this information is ‘straight forward to produce’ which is heartening, but will it actually provide meaningful data to allow us to assess a Company’s genuine gender pay divide? We hate to be cynical, but we are not so sure.
Each quartile will inevitably cover a reasonably large spread of roles and seniority (and therefore pay grades) and statistical spikes could appear that may make the gap look more appalling than it really is. In addition, the definition of what constitutes pay includes sick pay and critically, maternity pay which means that, given that maternity pay at a statutory level is very low, this will have a significant impact on the data in any particular quartile.
The Government’s answer to this is that companies can add an accompanying statement which explains any anomalies in the statistics, but we wonder if anyone will read that statement or rather prefer to be outraged by the starkness of the raw data and the inevitable gaps that appear.
What happens if you don’t comply and don’t publish your data? Well, as with the recent Modern Slavery Act… nothing at all. There are no penalties whatsoever for failure to comply. In the consultation paper, the closest the Government gets to anything even remotely menacing is to say that they will ‘closely monitor the levels of compliance by employers to ensure that the measures in place are effective.’ They also say that they will review it all again in five years – presumably if they are still in government at that point.
So should employers just not bother? Well, it is possible that an employment tribunal might take non-compliance as a reason to adversely infer discrimination in an organisation as part of an on-going claim, and it would be best practice to comply, but it seems that the risks of not doing so are low and yet the risks of publishing data that doesn’t genuinely reflect the facts, is conversely quite high.