Ignore gender pay gap issues at your peril!…
David Cameron has confirmed that consultation has opened with a view to implementing regulations in relation to the collection and publishing of gender pay gap information for private and voluntary employers with 250 employees or more. Whilst the statutory provision is not yet in force, the government have hinted that the regulations will follow soon after the consultation ends in September 2015.
The issue of gender pay equality has gained traction since March 2015 when the former government laid the foundation for regulations to be introduced, although businesses could voluntarily publish such information prior to this. However, only 5 businesses have voluntarily published pay gap information since 2011.
There has been a recent focus on the roles of women in leadership and board level positions. Since 2011, there has been an 11% increase in female board members of FTSE 100 firms, meaning the government has achieved its target to get women into at least a quarter of boardroom seats by 2015.
There has also been a focus on initiatives to encourage women back to work, for example the Shared Parental Leave regulations, suggesting that this is now a priority for the government.
So what does it mean for your business?
Employment Tribunals already have the power to force any business to carry out an equal pay audit and publish gender pay information, if it has the misfortune to lose an equal pay case. This involves businesses identifying any differences in pay between male and female employees, the reasoning behind the differences, along with the reasons for any equal pay breach, and where those differences cannot be justified, any proposals to rectify those differences and ensure no further equal pay breaches occur in the future.
This consultation process will follow similar lines, however, it is difficult to see the government softening their approach in relation to the final form of these regulations.
Can I simply ignore the issue?
The key point here is that if there are differences in pay, which cannot be justified, the information must be disclosed. Therefore, the potential negative publicity arising from a business that pays male and female employees differently could also impact upon the reputation of your business and particularly upon talent retention and attraction of both male and female staff. Equally, there is the clear risk of further, expensive equal pay claims.
How can I prepare for this forthcoming legislation?
This is the time for businesses to get their ‘house in order’. Ensuring an equal pay review is carried out at an early stage will expose any potential pay issues, which can then be practically dealt with before the requirement to publish comes into force.
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