The government has said that it will only use the power in the Equality Bill to require private sector employers to publish gender pay gap reports if insufficient progress is made voluntarily by 2013. The EHRC (Equality and Human Rights Commission) has now published its proposals for voluntary reporting of the gender pay gap, following consultation. It suggests that employers with 500 employees should report on at least two of the following indicators including the narrative (to increase to three indicators within two years):
- the single figure difference between the median hourly earnings of men and women;
- the difference between the average basic pay and total average earnings of men and women by grade and job type;
- the difference between men’s and women’s average starting salaries;
- a narrative explaining the context (eg female participation rates), exploring and analysing the causes of any gender pay gaps, describing workforce involvement in addressing the issues, and listing actions being taken.
Employers with 250 to 500 employees would be expected to report on one of the above options. The EHRC intends to start monitoring take-up by the larger employers in 2010 and by smaller employers in 2011. Guidance on the proposals will be available by April 2010.
The EHRC have confirmed that for the next two years they are unlikely to investigate employers who comply with these proposals. However, employers will remain exposed to the risk of legal claims (which may be facilitated by the publication of the information), so they need to consider their response carefully. It would certainly be prudent to analyse the extent of any gender pay gap now, even if employers decide not to publish the information at this point.