Pay & Benefits

Gender Pay

Clare Parkinson

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01 Apr 2019

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The gender pay gap also referred to as the gender wage gap has been a major talking point for employers and employees.

The UK government introduced the Equal Pay Act 1970 to prevent discrimination between men and women in employment. The legislation prevents unfair treatment in terms of pay and the conditions of employment between both sexes.

They then developed upon this legislation to create the Equality Act 2010. It forms the basis of anti-discrimination laws in Great Britain. It also individuals from discrimination on the grounds of their age, gender, sexual orientation, etc.

In this piece, we’ll define the gender pay gap and explore the regulations in place to protect employees. We’ll also highlight your obligations for reporting on the gender pay gap in the UK.

 

What is the gender pay gap?

It’s the difference in the average hourly wage for men and women across a workforce.

The Office of National Statistics (ONS) defines it as the difference in the median pay between men and women. They also found in April 2017 men earned 18.4% more than women did in the same period, although this figure fell from 27.5% in 1997.

To identify the gender pay gap in your organisation, you’ll need to calculate the difference between the average hourly earnings of men and women as a proportion of the average hourly earnings of men’s earnings.

Gender pay gap reporting in the UK refers to the act of publishing data showing how large the pay gap is between employees of both sexes.

 

Why is there a gender pay gap?

There are many reasons why it exists and why we are now trying so hard to narrow that gap.

Some of the more popular reasons are:

  • More men in senior roles: One of the more popular factors that negatively affect the gender pay gap is the fact that most of the highest-paid sectors are male-dominated. There is no contesting the fact that there are more men than women in senior roles in the workplace. This means that the men in these positions get a lot more money than the women in the same position, which in turn has a negative effect on the ongoing problem.

  • Women and maternity leave: The notion of shared paternal leave was only introduced to the UK in 2015. Before then, women had more leave available to them for maternity leave. For example, the statutory maternity leave period is 52 weeks while the paternity leave period is two weeks.

After the maternity leave period, new mothers typically have two options. To return to work full-time in the same position and on the same pay or to drop down to part-time jobs that are below their skill set and with limited opportunity for progression.

Both of these options leave women with more expenses because as well as the costs of clothing and feeding the child, they’ll also have to pay for childcare. All the while, a man in the same position would have gained more experience. He could also potentially get a pay rise or even progress further within the company during that period.

The EHRC found that up to 54,000 mothers in the UK could leave their job early because of being fired, made redundant or treated so poorly that they choose to leave after they became pregnant.

 

Debunking the gender pay gap myth

Unbelievably, some employers still find themselves asking, “is the gender pay gap real”?

This is not as straightforward as you think, a variety of complex and overlapping factors contribute to creating and maintaining this gap.

Despite that fact, there’re still some myths and misconceptions about the gender pay gap. The most popular ones include:

Deny, deny and deny some more: As unlikely as it may seem, some employers still believe the gender pay gap doesn’t actually exist. This is in fact not the case. The ONS provided various gender pay gap statistics that found that as of 2018, the gender pay gap among full-time employees stood at 8.9%. With less than a 1% decline since 2012, it’s apparent that this is still an ongoing issue.

Blaming the job: After publishing the gender pay gap report, a number of employers blamed the gap in pay on the types of roles women applied for. However, according to the Telegraph, even in executive positions, men still earn a higher basic salary compared to their female counterparts. They discovered that the average man in an executive position earns up to £40,325 annually compared to women in the same position earning up to £35,265 annually.

Blame women: Another popular defence of the gender pay gap is that women don’t ask for raises. However, research carried out by the Harvard Business Review found that while women do ask for raises as much as men, they’re less likely to get them.

Less education, less experience: A common misconception is that women receive less pay because they’re less educated or less experienced meaning they’re unable to qualify for well-paid positions. This couldn’t be further from the truth. Studies suggest that girls do better in school than boys. And even after school, reports show that women master’s degrees are still paid less than men without them. The problem is many women traditionally gain employment in sectors that offer less in terms of financial rewards, such as the care and hospitality sectors.

 

Gender pay laws

In the UK, the main legislation governing the discrepancies in pay between male and female employees is the Equality Act 2010.

The legislation defines nine personal characteristics protected under this Act. They are:

  1. Age.
  2. Gender reassignment.
  3. Being married or in a civil partnership.
  4. Being pregnant or on maternity leave.
  5. Disability.
  6. Race including colour, nationality, ethnic or national origin.
  7. Religion or belief.
  8. Sexual orientation.

This was then developed to form The Equality Act 2010 (Gender Pay Gap Information) Regulations 2017. In it, companies with 250 or more employees must publish their gender pay gap statistics on the government website.

It’s also worth noting, this differs from ‘unequal pay’, which involves different payments for men and women doing the same or similar job and is unlawful.

 

Gender pay reporting regulations

The gender pay regulations that came into play in April of 2017 was set up to promote gender pay equality in the workplace.

Gender pay gap reporting aims to close the wage gap in the UK. With it, you can identify the gaps in pay between male and female employees and take action to reduce and eliminating gender pay inequality.

The Equality and Human Rights Commission (EHRC) is the body in charge of enforcing this regulation. They’ll investigate those that don’t comply with it, as it is technically a breach of the regulation. If you’re in breach of the requirement, as well as forcing you to publish the data under a court order, you could face a summary conviction and unlimited fines.

For those that don’t adhere to the new regulations, the EHRC may carry out investigations under the Equality Act 2010 and subject the organisation to enforcement action the same as those who didn’t publish their data.

 

How is the gender pay gap calculated?

It is normally calculated by subtracting the median hourly earnings for women from the median hourly earnings for men.

For an accurate gender pay gap calculation, follow the instructions provided on the government website.

It’s worth noting, most companies use the hourly earnings to calculate this figure so as not to distort results by the differences in hours worked by men and women.

 

The difference between equal pay and gender pay gap

Most people associate both as they address the differences between the pay men and women receive in the workplace. But it’s worth noting, issues relating to gender pay differ from those related to ‘equal pay’.

Although both issues address similar concerns, they are two completely different things. Equal pay addresses the issue of wage equality (equal pay for equal work). The Equal Pay Act brought with it the Equality Act 2010 making equal pay between genders a legal requirement.

 

Expert Support

You can download our free whitepaper for more gender pay gap facts and information regarding gender pay reporting. You can also contact one of our helpful consultants for advice on how to close your gender pay gap. Call us free on 0808 145 3380.

About the Author

Clare Parkinson has over 20 years’ experience in the Croner Reward business. As Business Manager, Clare leads a team of Reward Consultants who specialise in the delivery of pay and grading related advice, including tailored pay benchmarking and gender pay reports.

Over the years, Clare has contributed to various industry publications on topics such as gender pay, executive remuneration and market pay trends.

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