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Audrey Williams: Don't sweat the small stuff

Thursday 06 April 2017

Audrey Williams, employment partner and discrimination law expert with Fox Williams LLP discussess the implications of the Gender Pay Reporting Regulations.

Audrey Williams Audrey Williams

Audrey Williams is an employment partner and discrimination law expert with Fox Williams LLP. She is a Fellow of the UK's Chartered Institute for Personnel & Development. She has particular expertise in discrimination, harassment and equal pay and is a court advocate.

After much discussion and consultation, the Gender Pay Reporting Regulations are finally in force (from April 2017). The deadline for large employers in the private and voluntary sectors to publish their gender pay gaps is 4 April; for those in the public sector it's 30 March.

We have already seen Virgin Money's 2016 Annual Report set out their gender pay report ahead of time. It is hoped other employers will take on board Acas' advice to publish early; this makes sense given that the first gender pay gap return will report on figures as at 5 April 2017 for private and voluntary sectors (the day before the Regulations came into force!), and 31 March for the public sector. The data will need to include pay in the pay period or payroll run in which these dates fall, and bonuses paid in the 12 months prior.

Many employers will no doubt be focused on the detail of what counts as bonus pay, ordinary pay and how to calculate the hourly rate. The Regulations do contain certain nuances and I have already advised clients on a range of issues including: the relevance or otherwise of retention payments, retrospective pay, adjustments in pay for new starters and leavers, as well as the relevance of SAYE, BAYE and other share and saving schemes. But it is important for employers not to lose sight of the wider potential impacts of these new reporting obligations, especially if too much attention is given to the mechanics and detail.

The reality is that interested individuals (potential job applicants, existing employees or indeed employee representatives and their lawyers) are less likely to focus on the detail and more likely to be interested in what the report says about the proactive diversity practices in an organisation,and how it compares to others. There may be some scope to explore the detail of the figures and calculations through collective bargaining and questionnaire type processes but most organisations are likely to report pay gaps adverse to their female employees.

Even with the campaigning and active targeting of female talent (from Lord Davies' review to the Women in Finance Charter), greater progress remains to be achieved. The most recent research reported in The Times on 27 March 2017, shows female FTSE100 Chief Executives are paid almost half that of male counterparts: pay gaps exist through all levels in most organisations and this report suggests it might in fact grow even if female talent progresses to more senior levels.

Employers should seek to distinguish themselves by demonstrating their commitment to addressing the gender pay gap and its myriad of causes. The Gender Pay Reporting Regulations say little on this, but the Acas guidance on Gender pay gap reporting which supports the Regulations makes clear that the aim of the new requirements is not reporting as a compliance requirement, but rather provides employers with an opportunity to address measures to improve those figures.

The narrative, action plans and objectives set by employers are likely to make the most interesting read. Beyond the public information, those signing off on the gender pay report (which must be a director or senior officer) and those responsible for collecting the data, should set managers and leaders in their organisation clear objectives to reduce the pay gap and achieve year on year improvement in the annual gender pay reporting figures. They should keep in mind:

  • gathering and reporting data of this nature should be an incremental exercise, the work is not done when the report is submitted
  • the value of this exercise lies in using the data to set targets and measures to improve
  • organisations committed to closing the gender pay gap will drill down into the figures to be better informed as to the causes and look to address them.

These supporting narratives will be published alongside the gender pay gap and statutory reporting, and could (should) comprise the most interesting and discerning parts of these new reports.

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