“The gender pay gap is an equality measure that shows the difference in average earnings between women and men.” Gov.uk
There are a number of complex reasons for the Gender Pay Gap according to Gov.uk. Primarily, the causes are;
- A higher percentage of women chose occupations that offer less financial rewards.
- A higher percentage of women work part-time, and part-time workers on average earn less than their full-time counterparts.
- Women are still less likely to progress up the career ladder into higher paying, more skilled jobs.
On the 12th of February 2016 the government published the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 which will be statutory law as of the 1st April 2017. The legislation requires organisations with 250 employees or more to publish their Gender Pay Gap results on both the organisations website and on a government website. The published regulations are applicable to private and voluntary sector organisations currently, however, the Government is aiming for the regulations to include the Public Sector within the next 12 months.
The Governments’ plan to make gender pay gaps publicly available means that employees, customers, suppliers and the general public which included possible future recruits will all be able to see an organisation’s efforts to comply with The Equality Act 2010. The Governments want the pay gap to be publicly available as it will encourage employers to take new changes, and faster, in order to reduce or eliminate their gender pay gaps.
- An employer who has had 250 or more employees, within the private or voluntary sector, in any year on the 5th of April each year, must comply with the new regulations.
- Organisations of all sizes should consider the advantages of the new regulations.
- Workers, some self-employed people, and agency workers are included and considered employees for the purpose of the gender pay gap reporting. Agency workers however, are included in the gender pay gap report of Agency that provides them.
- Equal Pay reporting and Gender Pay Gap reporting are different reports. Equal Pay reporting is a published report which considers the difference of pay between men and women who carry out the same, similar or work with equal value. Whereas, the Gender Pay Gap report will show the variance in the mean pay between all male and female employees within the organisation.
- There are 6 calculations which organisations are required to publish. ACAS outline these as:
- average gender pay gap as a mean average
- average gender pay gap as a median average
- average bonus gender pay gap as a mean average
- average bonus gender pay gap as a median average
- proportion of males receiving a bonus payment and proportion of females receiving a bonus payment
- proportion of males and females when divided into four groups ordered from lowest to highest pay (ACAS)
- The calculations must be confirmed by top management, for example, a Managing Director or Chief Executive.
- On publishing, employers are allowed to include notes alongside their calculations which should explain some possible reasons for the results of calculations and also outline some actions the organisation is going to take in order to improve their gender pay gap.
- The calculations should identify areas for improvement. For example, an organisation may justify a high Gender Pay Gap in relation to bonuses as the executives receive the highest yearly bonus and most of the executives are men.
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