Gender Pay Gap

If you run a business with over 250 employees in the UK, the gender pay gap report should never be far from your mind.

This is because current legislation requires you to publish your businesses’ gender pay gap every year.

As a follow up to any report, you should consider what you can do to improve gender diversity across your business, and how to best narrow your gap.

But before you consider all that, you need to know whether it’s a mandatory requirement for your business.

Who has to report their gender pay gap?

You’ll need to report if you’re a ‘relevant employer.’

To meet this criteria, you’ll have to have a base of operations in England, Scotland or Wales. You must also employ 250 or more employees.

Workers also need to be included in the report, as do some self-employed people, and agency workers.

How to report on the gender pay gap

Firstly, familiarise yourself with the reporting deadline. If you’re part of a public sector organisation, it’ll be 30th March every year.

If you’re part of a business or charity, it’s 4th April every year.

In the UK, there are certain gender pay gap reporting requirements. More specifically, there are six key metrics to cover:

1. The difference between the mean hourly rate of pay for male and female employees
2. The difference between the median hourly rate of pay for male and female employees
3. The difference between the mean bonus pay paid to male and female employees
4. The difference between the median bonus pay paid to male and female employees
5. The proportions of male and female employees who were paid bonus pay
6. The proportions of male and female employees who were in the lower, lower middle, upper middle and upper salary quartile bands based on hourly rates of pay.

You must express all of those figures as a percentage.

One question we regularly receive is, “Do I need to worry about gender pay gap reporting for group companies?”

If your organisation is part of a group, you must report individually providing the organisation meets the employee limit requirement.

A group that consists of multiple entities that publish reports may choose to report combined figures for the whole group. However, this is not legally required.

How to calculate your gender pay gap

The basic gender pay gap calculation is as follows:

• Mean gender pay gap: deduct the mean female hourly pay rate from the mean male hourly pay rate. Then, divide the result by the mean male hourly pay rate and multiply by 100.
• Median gender pay gap: deduct the median female hourly pay rate from the median male hourly pay rate. Divide the result by the median hourly pay rate and multiply by 100.
• Mean bonus gender pay gap: deduct the mean female bonus pay from the mean male bonus pay. Divide the result by the mean male bonus pay and multiply by 100.
• Median bonus gender pay gap: deduct the median female bonus pay from the median male bonus pay. Divide the result by the median male bonus pay and multiply the resulting figure by 100.

These calculations are just a snapshot of what you need to consider when approaching your gender pay gap. For a full breakdown and support in your calculations, get the support of a Croner Reward expert.

What makes a gender pay gap report inaccurate or non-compliant?

There are a number of issues that can cause a report to be non-compliant. Some of these issues include:

• Not linking to a written statement. (the required calculations must be accompanied by a written statement confirming the information is accurate. This must be signed by a senior person within the organisation, usually a director.)
• Uploading the same report from the previous financial year.
• Changing data that has already been submitted.
• Non-responsible employees being named as responsible people.

What are the most common errors?

 

 

 

Although the issues above present the biggest problems with compliance, they are not the most common issue with pay reports.

The main issue found in gender pay reports is simply that there are basic mathematical errors, some small, others large enough to claim extraordinary gaps, and in some cases claim that women are paid nothing at all, which cannot happen for obvious reasons.

How can you ensure reporting compliance?

Errors such as these may seem clear upon review, but completely invisible on first glance. To make sure mistakes like this don’t occur, be sure to review the report when complete and seek a second opinion.

What’s the current situation?

Interestingly, the latest reports show that the gender pay gap has fallen since the Gender Pay Gap reports first came in. The overall gap is now at 7.7%, which is down from 8.6% since the previous year. There is still some fluctuation in earnings dependent on age, as older female workers tend to be underpaid the most by comparison.

Croner Reward has put together a one-stop solution to make the gender pay reporting process as easy as possible, from initial preparation to analysis, conclusions and recommendations. This White Paper aims to explain the key areas where equal pay and the requirement of gender pay differ. For more information on the Gender Pay Gap and reporting, call us on 0808 145 3380.