Mon 04 Feb 2019

Gender Pay Gap Countdown

  4 April 2019 sees the end of the second year of gender pay gap reporting for private and third sector organisations (or 31 March for the public sector).  


Last year 94% of companies required to report on their gender pay gap did so on time, with the remaining 6% having complied by 1 August 2018.  A BEIS report published in August 2018 looking at last year's responses recommended that this year "there should be no excuse for failure to submit accurate figures by the deadline and organisations should expect to receive a fine for not doing so".   On a practical level, having compiled and reported on the figures once before, the organisations that require to report should find it a more straightforward process this time round.  However, as of 5 February,  only 916 of the approximately 10,500 anticipated reports have been published on the UK Government's website. 

Assuming that the Regulations are complied with, can we expect to see anything different this year? 

What we will all be looking for from organisations, of course, is an improvement on last year's figures.  But that may well be a premature expectation.  The snapshot date for the reports we will see this year was, after all, 5 April 2018, one day after the final day for reporting on the 2017 figures.  While the first year's reports were dissected and commented upon at some length, that process simply hadn't happened as at the snapshot date so it seems inevitable that little will have changed in terms of the figures themselves or, cynically, if figures have improved significantly that may raise questions as to their accuracy.  Realistically, real improvement may only be measurable once the 2020 figures become available. 

What we may see this year is an increase in the amount and detail of information provided by those required to report.  Simply reporting the figures is not enough to identify what the possible causes of a gender pay gap are, and you can't fix something if you don't know why it's broken.  In December 2018 the Equality and Human Rights Commission (EHRC) published a report - Closing the Gender Pay Gap - highlighting the benefit of publishing explanatory narratives along with the figures - something which is not mandatory at the moment but which can be done on a voluntary basis.  As well as providing a valuable opportunity to explain the situation to employees, shareholders and the public at large, the narratives can also be used to set out what an organisation intends to do to address the gap through time-bound and target driven action plans.   

The EHRC report called for these narratives to become a legal requirement, echoing a recommendation contained in a BEIS report of August 2018.  However, the UK Government response to that report has rejected that recommendation on the basis that organisations maintain the freedom to produce an action plan "relevant to their individual situation that they can truly commit to and embrace".  The response did though set out an expectation that the diverse range of action plans that have been produced by different organisations and placed on the Government portal will, alongside "Government encouragement", motivate other organisations to produce their own action plans in future years.  The past year has also seen guidance published to help organisations produce action plans including guidance in the BEIS report on developing strategies to close gender pay gaps and the Government Equalities Office guidance on evidence based actions employers can take to reduce the gender pay gap. 

The UK Government response rejected the BEIS recommendation to reduce the reporting threshold from organisations with 250 employees to those with 50 employees from 2020 onwards. In addition, while recognising that there are concerns about how "partners" are currently treated within calculations the UK Government has no immediate plans to make inclusion of partners' pay mandatory. 

Undoubtedly gender pay gap reporting is only the starting point for reducing and eliminating the gap - there is much to be done and the 2019 figures will be a small stepping stone towards that aim.   

If you are interested in the up-to-date number of reports that have been published that can be found here.

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