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Employment Law Update

How are you going to present you gender pay gap figures?

Many of our clients have got to grips with the figures now, but are worried about how to display the results and whether publication will encourage greater scrutiny of their pay practices.

What information must be provided?

The report must set out the following six calculations:

  1. The mean and median gender pay gap
  2. The mean and median bonus gender pay gap
  3. The proportion of males and females receiving a bonus
  4. The proportion of males and females in each quartile band

There is no legal obligation to provide any other information. So the raw data itself does not have to be disclosed.

Where does the information have to be published?

You must publish your findings on your own UK website, in English, in a manner that is accessible to all employees and the public, and once published it must remain there for at least three years. You don’t have to provide this information in a prominent place on your homepage but it should not be “buried” either.

If your business does not have its own website because it is part of a group organisation, you can publish on the group’s UK website (and many are). If your business is not part of a larger corporate structure and doesn’t have its own website, you should create a separate webpage for your gender pay gap information.

The report must include a written statement confirming that the information is accurate. This must be signed by a director, partner or member of your business’s governing body. Please contact us if you would like a full list of those who can sign. Public authorities do not have to provide a statement of accuracy.

You also have to upload the information to a government website which is now available. The site is not easy to find and is available here: https://www.gov.uk/report-gender-pay-gap-data (You will have to register to access the site.) The government has said that it intends to create a publicly available league table or database. So far, only a handful of employers have published their statistics.

Please note, the reporting requirement is entirely separate from other corporate reporting requirements. There is no requirement to publish gender pay gap information in a company's annual report. However, listed companies are required to include gender information about directors and senior managers in their strategic report.

Should you provide a narrative or just stick to the figures?

There is no need to do anything other than provide the required data. However, it is worth considering including a short narrative to provide context and set out the steps your organisation is taking to narrow the gap or at least to explain why there is a gap. The starting point is to consider how your figures compare to the national average and, separately, those in your industry if that information is available.

If your figures compare favourably to the national average, you might want to flag this to demonstrate that your business is already “ahead of the curve”. If some of your figures are higher than the national average, you may want to explain the reason for this, particularly if it is only focussed in one part of the business to avoid creating the impression that you have a significant gap throughout your organisation as this may put off, for example, applicants who may have wanted to join your organisation. Providing positive data from more meaningful like for like comparisons will help you to tackle complaints by staff head on.

Remember though, whatever your figures and whatever you say about them will act as a baseline for future years and can be used to show improvements.

Many of our clients have decided against only providing the required data and are opting for more transparency. Being open about the issue, why it has arisen and sharing future plans will provide a positive message even if the data itself could be viewed as disappointing.

It can also be helpful to develop an info-graphic setting out the relevant detail and providing a separate explanation for this.

Some of our clients have also opted to provide a short explanation of the differences between the gender pay gap and equal pay in an attempt to reduce the likelihood that staff will look at their figures and assume they have actionable claims. Voluntarily publishing gender pay gap figures by seniority may also demonstrate that, whilst the organisation has a gender pay gap, it does not have an obvious equal pay problem.

How can we improve our figures?

The UK pay gap has started to fall (from 19.2% to 18.1% in the past year - the biggest drop for a decade). The real challenge for companies is to address the root causes of gender pay and other workplace inequalities and it is sensible to take time to analyse the data and try to understand what they are telling you about pay, recruitment, retention and progression within your organisation.

You may need to consider tactical reward interventions such as:

  • Targeting salary adjustments at those lower in the range rather than having one size fits all;
  • Paying bonuses as absolute amounts rather than a percentage of salary;
  • Reviewing recruitment processes and starting salaries which are often be higher for male workers; and
  • Ensuring performance management outcomes and processes are “gender blind”.

Should we delay publishing our data?

The deadlines for providing data from the first “snapshot date” are 4 April 2018 for private companies and 30 March 2018 for public organisations. Whilst you can leave publication until the last minute, we don’t recommend that you do so. In fact, once you have crunched the numbers and properly considered the causes behind the pay and agreed a strategy to address these, you should go ahead and publish.

A number of organisations have already done so and have used early publication to generate good publicity for their organisations, even in circumstances where their figures are (in some cases substantially) above the national average.

Some examples:

It is also possible, that those organisations who publish at or around the deadline will be subjected to greater press scrutiny as the media will be aware of the deadlines that apply.

We can help you

If you need help with any aspect of your gender pay reporting duties, please contact Glenn Hayes (glenn.hayes@irwinmitchell.com).

Published: 5 May 2017

Employment Law Update - May 2017

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