What employers need to know about the gender pay gap

Kate Palmer, head of advisory at Peninsula, explains how employers can break the cycle of underpaying female staff.

The pay gap begins as soon as women start working and is at its greatest when a woman turns 50, with female employees cumulatively £85,040 worse off than men over the next decade, according to TUC analysis of figures from the Office for National Statistics

From October 2016, businesses are obliged to report gender pay gaps.

Everyone has heard of the ‘gender pay gap’ – the difference in the average pay between men and women within a company.

If a private sector business or voluntary organisation with 250 employees or more, then as of October 2016, they will need to start thinking about disclosing details of this controversial subject.

They will need to take a snapshot of gender pay data in April 2017 and report on it by April 2018.

Interim details on the requirement have recently been published. Draft regulations contain the specific areas which will need to be reported on:

  • the difference in mean pay between male and female employees;
  • the difference in median pay between male and female employees;
  • the difference in mean bonus pay between male and female employees;
  • the proportion of male and female relevant employees who received bonus pay during the period of 12 months preceding the relevant date; and
  • the numbers of male and female employees employed in quartile pay bands.

Information will need to be published annually on the businesses public website and carry the signature of senior management e.g. a Director or Partner.

There will also be the opportunity to include an explanation for any gaps identified.

Although we still await final confirmation of the procedures, one thing is certain, if you’re likely to be called on to provide this information, it makes sense to start preparing now.

You can do this by:

  • Checking your data processes – can you report and analyse your gender pay data under current systems?
  • Conducting an informal pay audit to include annual salaries defined by staff role and gender
  • Look for suspected pay gaps – consider whether or not there are lawful justifications for any differences, and deal with obvious disparities
  • Review starting salaries – men often negotiate higher starting salaries, so monitor the salaries of new joiners

Kate Palmer is the head of advisory at Peninsula.

Praseeda Nair

Praseeda Nair

Praseeda was Editor for GrowthBusiness.co.uk from 2016 to 2018.