Gender pay gap now a legal duty

Gender gap

Gender Pay Gap reporting for companies with fewer than 250 people – should we or shouldn’t we?

With Gender Pay Gap Reporting now a legal duty for private sector employers with 250 or more employees, we consider in this article whether gender pay reporting should be good practice for companies with fewer than 250 employees.

In terms of the new rules for companies employing more than 250 people, their statistics must be made available on the Government’s reporting website from today.

The Equality and Human Rights Commission’s (EHRC’s) focus now will be on those employers who do not publish the information required. Non-compliant employers will be sent letters on 9th April and they will then be given 28 days to comply before an investigation takes place and an unlawful act notice is issued.

With those companies with a 250+ headcount having the pressure of these obligations placed upon them to report publically, what about those with fewer than 250 people? Should we do it anyway?

Whilst smaller companies won’t be obligated to publish any statistics on the Government’s reporting website, as part of our diversity strategies we believe it is good practice to conduct regular equal pay audits anyway.

Equal pay audits differ to gender pay gap reporting. ACAS says: ‘Equal pay deals with the pay differences between men and women who carry out the same jobs, similar jobs or work of equal value. It is unlawful to pay people unequally because they are a man or a woman.

The gender pay gap shows the difference in the average pay between all men and women in a workforce. If a workforce has a particularly high gender pay gap, this can indicate there may a number of issues to deal with, and the individual calculations may help to identify what those issues are.’

So with this in mind, it makes good sense to carry out both an equal pay audit and at the same time look at the difference in average pay between men and women across the company.

But why?

The benefits of carrying out such an audit/review are plenty:

  1. Under the rules of the Equality Act 2010, employers must give men and women equal treatment (including pay) if they are employed to do equivalent work. So equal pay tribunal claims can be avoided by carrying out a pay audit and remedying any discrepancies.
  2. It doesn’t take long to do (especially when we don’t have the pressure of the EHRC breathing down our necks!)
  3. It makes good sense as part of a well-rounded diversity and inclusion strategy. If you don’t have one of these, try carrying out an ACAS diversity audit on your company using the ACAS Model Workplace questionnaire (see below for more information on this brilliant and simple tool)
  4. If you are close to growing to more than 250 people, you’ll already be a pro at conducting the audit and having the data ready to publish.
  5. And potentially most importantly - it’s engaging for employees – to show that you care enough to do it and have nothing to hide in doing so.

And How?

  1. First of all, do you have a diversity and inclusion strategy? If not, we recommend you do this: This simple tool will enable you to assess the effectiveness of your diversity practices and at the same time give you practical guidance where your organisation may be falling short.

You will answer a few simple questions about your diversity policies, recruitment and selection, flexible working, equal pay and equal opportunities and will be given guidance based on your answers. It’s a BRILLIANT tool to help you get your diversity practices up to scratch quickly and easily.

  1. And whilst we’re on the subject of ACAS – they are an invaluable source of guidance and information and this guide does exactly that – gives great advice and guidance in relation to diversity.
  1. Once you have a diversity and inclusion strategy and plan of action in place, you can start your equal pay audit and gender pay gap report – you will need to collate all your pay data and compare male and female compensation by role. There is heaps of guidance online if you need it. And if your findings give you any cause for concern, you should highlight them to the directors of the business with proposals in relation to correcting them.

Helen Walpole

HR & Operations Director

Back to News & Advice