Equal pay reporting

Posted on: June 5th, 2015

It’s been 45 years since the introduction of the Equal Pay Act [29 May 1970] and yet equal pay still appears to be a hot topic.

In September 2011, the Government introduced a “Think, Act and Report” framework under which companies could voluntarily report.  Theresa May said at the time that: “The aim is [to] improve transparency on pay and wider workplace equality issues to help drive change, including closing down the gender pay gap.”

Over 200 companies signed up to the framework.  Only four got round to voluntarily reporting.  Of those four, only two gave the information broken down by every pay grade rather than simply providing statistical information.

Clearly, not a resounding success for the scheme.  So what now?

Well, since 2010 and the introduction of the Equality Act, the Government has had the ability to require private sector employers with 250 or more employees to report gender pay gap information and, given the phenomenal  failure of the voluntary reporting framework, the Government has committed to introducing mandatory reporting by Spring 2016.

The level of detail required to be reported is currently unknown, but it is likely to cover at least the difference between male and female starting salaries, the difference between average basic pay and total average earnings of men and women broken down by grade and job type, as well as other components such as bonuses.

Employers affected should consider how they are going to approach such an information-gathering exercise.  It might be a good idea to see what the position is before you have to disclose the information publicly.  There is likely to be a fairly nominal fine of about £5,000 for non compliance but it is the public, as well as employee, relations issues caused by the discrepancies that are more likely to be damaging.

Do bear in mind, however, that if you start collating this information now it could be disclosed if you have an equal pay act claim in the meantime so involving lawyers could be a good step to ensure that any internal report on gender pay issues is covered by legal professional privilege and therefore remains confidential.