Group of young people working together at the office.

What is the Gender pay gap and what are the causes?

Today, there is still a clear gap in wages between men and women. The government have, over recent years, shown commitment to ensuring this gap is eliminated in the future.

According to the Equal Pay Portal, in April 2016 the gender pay gap (for median earnings) for full-time employees was 9.4 per cent, down from 9.6 per cent in 2015. If part time employees are included, in 1997, when the first survey was conducted, the gap was 27.5 per cent and in 2016 the gap was reported to be 18.1 per cent.

The government has stated that the causes of the gender pay gap include:

  • A higher proportion of women choosing occupations that offer less financial reward (e.g. administration). Many high paying sectors are disproportionately made up of male workers (e.g. information and communications technology).
  • A much higher proportion of women work part-time and part-time workers earn less than their full-time counterparts on average.
  • Women are still less likely to progress up the career ladder into high paying senior roles.


New legislation you should be aware of from April 2017

From 6 April 2017, employers with more than 250 employees will be asked to publish the mean and median hourly pay gap and annual bonus between male and female employees. The new regulations will apply to approximately 8,000 businesses, voluntary and charitable organisations across England, Scotland and Wales.

ACAS have produced guidance to help employers report their information within a 12 month period from April 2017. They have also provided some key points to consider;

  • An employer must comply with the regulations for any year where they have a ‘headcount’ of 250 or more employees on 5 April, but employers of all sizes should consider the advantages.
  • A wider definition of who counts as an employee is taken from the Equality Act 2010. This means that workers are included, as well as some self-employed people. Agency workers are included, but counted by the agency providing them.
  • Gender pay reporting is a different requirement to carrying out an equal pay audit.
  • There are six calculations to carry out, and the results must be published on the employer’s website and a government website within 12 months. They must be confirmed by an appropriate person, such as a chief executive.
  • Employers have the option to provide a narrative with their calculations. This should generally explain the reasons for the results and give details about actions that are being taken to reduce or eliminate the gender pay gap.

You should be aware that failure to publish the report is an unlawful act which may prompt action from the Equalities and Human Rights Commission.” For more information, advice and guidance on reporting your gender pay gap visit Acas and Government Equalities Office (GEO)

 

What else is the Government doing to close the gap?

As well as requiring large employers to publish their gender pay gap and gender bonus gap the Government is also taking the following action to close the gap:

  • Offering 30 hours of free childcare for working families with 3 and 4 year-olds; and
  • Encouraging girls to consider a wider range of careers, including in those higher paying sectors traditionally dominated by men.

The government has already:

  • Extended the right to request flexible working to all employees;
  • Introduced shared parental leave; and
  • Commissioned a review to look at how we can remove the barriers preventing women getting to the top of their careers.

 

In summary

The Government is working hard to try and close the Gender pay gap. From April 2017 all employers who have 250 or more employees will have a maximum of 12 months to publish the mean and median hourly pay gap and annual bonus between their male and female employees.

Failure to do so could result in action being taken by the Equalities and Human Rights Commission. However, there are guidelines and support out there from Acas and Government Equalities Office to help you meet your legal obligations.

Jenna Gorham MCIPD

HR consultant, aspire cambridge
Found this blog interesting; why not take a look at our other HR blogs https://www.aspirecambridge.co.uk/blog/