UK: Pay gap reporting - EHRC recommendations and HSF review of gender pay gap reports published so far

The Equality and Human Rights Commission has recently published research into gender, ethnicity and disability pay gaps, along with a strategy for reducing those gaps, available here. The strategy's recommendations include Government legislation to make the right to request flexible work available from day one (rather than after 26 weeks as currently) and to introduce non-transferable 'use it or lose it' parental leave for fathers paid at a level incentivising take-up, as well as consultation on extending the pay gap reporting duty to disability and ethnicity.

The EHRC urges employers to advertise all jobs for flexible working, including those at senior levels unless there is a genuine business need making this impossible, to voluntarily report on ethnicity and disability pay gaps, and to tackle unconscious bias in recruitment and performance decisions.  The Chair of the EHRC, David Isaac, has also called for the EHRC to be given enhanced powers, including to issue enforcement notices or impose a civil sanction where large organisations fail to publish their gender pay gap (see his blog here).

So far, only around 1% of the companies covered by the obligation to publish their gender pay gap have done so, although the remainder do have until 4 April 2018 (for private companies) to comply. Last week Justine Greening, Minister for Women and Equalities, was reported as urging companies to 'fast forward' plans to publish their gender pay gap and stating that it was unacceptable for companies to give no timeline on when they plan to report before the cut-off date. Clients who are currently considering what information to include with their figures may be interested in our review of the reports uploaded so far. Around half of reports have included a voluntary narrative seeking to explain their figures, most highlighting the under-representation of women at senior levels as the main cause of the gender pay gap and some providing additional pay breakdowns to demonstrate this. Under half of the detailed reports go on to set out the steps the organisations are taking to address the gender pay gap; common strategies mentioned include mentoring, unconscious bias training, flexible work, and reviewing pay processes. Please contact us if you would like a copy of our review or advice on drafting your report.

A gender pay gap will not necessarily indicate the existence of a potential equal pay claim (a gap can often be explained in large part by factors such as occupational segregation, an unequal gender split in senior or junior roles, or other non-gender-related factors). However, the media around the reporting of pay gaps leads to a risk of damage to reputation affecting business and recruitment, and has heightened consciousness of equal pay as a workplace issue which may lead to an increase in equal pay claims (whether or not justified). These risks make explaining the data all the more important.