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For many employees and employers, the gender pay gap (and eliminating it) is hugely important. Despite many advances in how women are seen in the workplace, the gender pay gap remains. In a recent study on pay rises by CIPHR, a payroll software provider, men were more likely to have received an inflationary salary increase in 2022 compared to women.
The study revealed that 22% of men were awarded a salary increase that was above or in line with inflation. Conversely, only 14% of women were awarded the same. This is all evidence to support that gender pay gap reporting is integral to increasing pay equality.
But what is the gender pay gap? And how is it reported?
In this article, we’ll discuss the gender pay gap and the rules and history around gender pay gap reporting UK.
What is the gender pay gap?
The gender pay gap is the difference in average earnings (median or mean) between women and men in a workforce. The gender pay gap is typically expressed as a percentage of men’s average earnings. You might see a statement like “women earn 15% less per hour than men”, for instance.
As well as calculating the gap across an entire workforce, it can also be applied to subgroups like worker age and work patterns, e.g., part-time working. These subgroup figures help people to understand if the gender pay gap is more prevalent among certain subgroups.
To put it into figures, in November 2020, the ONS (Office for National Statistics) showed gender gap reporting UK to be 15.5% for all employees and 7.4% when only full-time employees are taken into account.
‘Gender pay gap’ and ‘equal pay’ aren’t synonymous
While both of the terms ‘gender pay gap’ and ‘equal pay’ describe the disparity between men’s and women’s pay at work, they’re not the same.
When we talk about equal pay, we mean when men and women perform the same work (or work of the same value), they must be paid the same. This rule is a law that employers are obligated to observe, not just for salaries, but for all employment conditions like pension payments, reward schemes, bonuses and holiday entitlements. These rules are stipulated under the 2010 Equality Act.
Instead, when we talk about the gender pay gap, we mean the difference in the average earnings of men and women across the whole labour market or a single organisation in a specified period regardless of their role. Even when employers have effective pay policies that promote equal pay, there might still be a gender pay gap in the organisation if, for instance, most of the men employed there have higher-paid jobs compared to women.
What is gender pay gap reporting?
Each year, employers with a headcount of 250 or greater, need to comply with gender pay gap reporting regulations. The employer has a ‘snapshot date’ on which calculations are based.
The majority of public authority employers like the armed forces, NHS bodies, schools, government departments, local authorities and universities have to use 31st March as their snapshot date. These employers are obliged to report their gender pay gap calculations by the following 30th March.
Other employers,, e.g., voluntary and private, use the 5th April as their snapshot date. Their calculations must be reported and published by the following 4th April. This type of employer also has to publish a written statement.
All gender pay gap reporting is done on the government’s gender pay gap service webpage.
Why is gender pay gap reporting important?
The Equality Act 2010 stipulates that women have a right to equal pay for equal work, i.e., work that is of equal value. For example, if you are a female assistant manager with the same job title, role and responsibilities as a male colleague, you both should receive the same pay.
The Equality Act goes further than this in that it entitles everyone to receive equal pay if their job offers similar value compared to another role, with decision-making, skill and effort being taken into account.
Of course, this is a clear and sensible ruling, yet despite this, there is still a gender pay gap.
Reporting gender pay gap information is important for many reasons. When the report shows no pay gap:
- It can raise morale.
- It can limit the number of difficult pay-related questions during appraisals.
- The organisation can benefit – It shows outsiders that they support equality.
- Recruitment is easier – New candidates know they’re entering a place of equal pay.
- A pay gap report proves the organisation supports equal pay.
When results aren’t so favourable, organisations will have to work harder to recruit women and prove that they take equality seriously. Gender pay gap reporting can also be used to highlight where unconscious bias might be impacting the workplace.
When was gender pay gap reporting introduced
The Gender Pay Gap (GPG) reporting regulations were brought in in 2017. The idea behind the reporting was to narrow and eliminate (eventually) the pay differences between women and men.
In the half-decade or so since the rules were brought in, there seems to have been positive, if not limited, improvement in the gender pay gap. For full-time employees, the gap was 9.1% in 2017 and 7.9% in 2021. For all employees, the gap reduced from 18.4% to 15.4% in the same period.
However, whether or not this is down to reporting remains to be seen. The ONS data shows that the gender pay gap was already in decline before the regulations came about.
Who has to report gender pay gap?
After the introduction of gender pay gap reporting, any employer with more than 250 employees was obliged to calculate, analyse and publish payroll data each year. Smaller organisations could voluntarily complete the reports – and many did.
There are two different regulations regarding employers’ gender pay gap reporting. One covers the majority of public authorities while the other set of regulations covers all other public authority employers as well as private and voluntary employers.
The different regulations stipulate different snapshot dates. An employer’s snapshot date is a specific reference date from which all payroll data is taken for the report. For example, if an employee leaves the company the day before the snapshot date, they won’t be included in the data. The same applies if a new employee joins the company the day after the snapshot date.
Public authority regulations
Companies that must follow the public authority regulations are listed here:
This includes (but is not limited to):
- The Armed Forces.
- Broadcasting (e.g., BBC, Channel Four).
- Civil liberties (the Information Commissioner’s Office/the Equality and Human Rights Commission).
- Legal services and court services (e.g., the Children and Family Court Advisory and Support Service, the Legal Services Board).
- The criminal justice system (e.g., Her Majesty’s Chief Inspector of Prisons, Her Majesty’s Chief Inspector of Probation for England and Wales).
- Education (e.g., the Student Loans Company, the Higher Education Funding Council for England, the proprietor of a City Technology College).
- Environment, housing and development (e.g., the Environment Agency, the Homes and Communities Agency).
- Health, social care and social security (e.g., the Care Quality Commission, Health Education England, the National Institute for Health and Care Excellence, an NHS foundation trust).
- Industry, business, finance etc. (e.g., the Bank of England, the Civil Aviation Authority, the Coal Authority, the National Audit Office).
- Local government (e.g., Transport for London, the Greater London Authority, a county council, a National Park authority).
- Ministers of the Crown and government departments.
- Parliamentary and devolved bodies (e.g., the National Assembly for Wales Commission, the Scottish Parliamentary Corporate Body).
- Regulators (e.g., the Disclosure and Barring Service, the Gambling Commission, the Health and Safety Executive).
- Transport (e.g., Highways England Company Limited, Network Rail Limited, High Speed Two (HS2) Limited).
These employers must use the 31st March as their snapshot date, and they must report and publish their information before the 30th March the following year. They do not have to submit written statements.
Private, voluntary and other public authority employers’ regulations
For public authority employers that aren’t listed in the Equality Act 2010 Schedule 19 list and all other private and voluntary employers with over 250+ employees, there are different regulations.
The snapshot date in this instance is the 5th April each year. Reporting must be done by the following 4th April.
Organisations that need to follow these regulations include:
- Private limited liability partnerships (LLP).
- Private limited companies (plc).
- Private and independent schools.
Organisations and businesses with fewer than 250 employees are not obliged to report their gender pay gap information but can do so if they wish.
When a business chooses to take part in gender pay gap reporting voluntarily, it can send powerful messages about its commitment to equality and transparency in the workplace.
When employers choose to report their gender pay gap information voluntarily, they need to follow the same regulations and processes as other employers.
Responsibilities of reporting gender pay gap information
As previously mentioned, employers who have 250 or more employees on their snapshot date need to comply with gender pay gap reporting regulations. The headcount on this date applies to all employees and isn’t related to full-time equivalent employees. This means that all employees, even ones who might only work a few hours, will be counted in the information.
Who counts as an employee?
It is the employer’s responsibility to know whether or not they need to report their gender pay gap information. They are also responsible for working out if their organisation has a headcount of 250 or more. More information can be found in the guidance information.
Employers must include the following in their figures:
- Those with contracts of employment – Even if they are on leave, work part-time, or do a job-share.
- Some self-employed people (if they have a contract to personally perform work for you).
- Salaried partners (but exclude partners in limited liability partnerships or traditional partnerships when they take a profit share that isn’t comparable with pay).
Employers shouldn’t count:
- Agency workers (as they will be counted among their agency’s figures).
- Employees on leave who have reduced pay (as they aren’t classed as ‘full-pay relevant employees’ – These should be counted on headcount and bonus pay gap only).
- Employees who don’t identify as ‘women’ or ‘men’.
Employers who have multiple payrolls also need to combine the data into one set of figures.
How is gender pay gap reported?
To report their gender pay gap information, employers need to use the government’s gender pay gap service online. Here, employers report their figures and, if required, a written statement (this is for private, voluntary and other public authority employers).
It is also a requirement for employers to publish their gender pay gap reports (and accompanying written statement where applicable) on their public-facing website.
Employers can also choose to publish an action plan and supporting narrative to explain their gender pay gap, but this is at employers’ discretion.
What employers need to include in their report:
Employers must report:
1. The percentage of women and men in each quarter of hourly pay.
2. The average (mean) gender pay gap for hourly pay.
3. The median gender pay gap for hourly pay.
4. The percentage of women and men who were in receipt of bonus pay.
5. The average (mean) gender pay gap for bonus pay.
6. The median gender pay gap for bonus pay.
7. The person in the organisation responsible for data.
8. The link to the organisation’s written statement (where applicable).
The organisation can input, save, revisit and edit their calculations before submitting them.
What employers need to include in their written statement (if they are following the regulations for private, voluntary and all other public authority employers)
The written statement needs to confirm that the information published in the gender pay gap report is accurate. It must be signed by a designated ‘appropriate person’.
The appropriate person depends on the organisation. This would be a director (or the equivalent) for a corporate body (but not a limited liability partnership). It would be a designated member for an LLP. Other types of partnership would need a partner to sign the document. Other people that might sign the statement would be a senior officer or governing body member (for unincorporated bodies) or the most senior employee for other types of body not mentioned.
Final thoughts on gender pay gap reporting UK
If nothing else, gender pay gap reporting sheds light on the best companies for gender pay equality. Employers who address the results of their gender pay reporting are much more likely to attract female talent to their organisation.
More and more, candidates are interested in organisational culture and look at their diversity statistics when they decide where they’d like to work. It has also been well documented that organisations who find themselves in the top quartile for gender diversity, are 25% more likely to have higher profits than companies in lower quartiles.