Today’s publication of a report by the Institute for Fiscal Studies brings the gender pay gap into sharp focus once again. The report confirms that the hourly wages of female employees are currently about 18% lower than men’s on average, and that the impact of taking time out of the workplace for family reasons continues to have a significant impact upon a woman’s pay potential for the remainder of her working life. Although this news is unsurprising – concurring with previous reports – its publication is timely, coming at a point when addressing the gender pay gap is high on the Government’s agenda, and reinforcing the need for action.
The Government has already made progress with legislation in this area. In February 2016, the Government confirmed that it would bring in laws to require employers of 250+ employees in the private and voluntary sectors to publish their gender pay gaps. See our previous Be Aware alert for details. The final legislation is still awaited and it appears will not be ready for its original October timeframe – although the power in the Equality Act 2010 to make the regulations did finally come into force on 22 August 2016. Instead, the legislation will reportedly take effect in April 2017.
It is expected, however, that the proposal for employers to take a first data snapshot of their pay arrangements in April 2017 will still stand, meaning that there may be a very short timeframe between employers knowing what their final obligations are, and having to comply. The first snapshot figures are also likely to relate to the period from May 2016, meaning that employers should already be thinking carefully about pay decisions and ensuring they are transparent, moderated and carefully documented. Employers will have until April 2018 to publish their first gender pay gap figures.
In the meantime, the Government has also published this week a consultation paper on gender pay gap reporting obligations in the public sector, which largely mirrors that of the private sector. The consultation closes on 30 September 2016.
With the Government committed to closing the pay gap between men and women, employers must ensure their houses are in order. Take our quiz, How equal is your organisation’s pay? to help identify where there may be pay issues in your organisation, but be sure to seek legal advice before taking any remedial action. Legal privilege may be able to protect the confidentiality of your information and the steps you plan to take.