The requirement for large employers to publish information annually on their gender pay gap came into force in 2017, and the deadline for publishing the second round of reports, 5 April 2019, is now fast approaching.
DLA Piper’s analysis of organisations’ gender pay gap reports submitted as at mid-February 2019 shows a slight improvement in the overall median hourly gender pay gap; however, around four in 10 employers are reporting wider gaps than last year. The media is already commenting on whether organisations have improved on their 2018 performance, demonstrating that there are potential risks in terms of reputational damage, negative comparisons with competitors and an adverse impact on employee relations.
The UK government is actively encouraging employers to tackle their gender pay gaps, but the subject is also under a global spotlight; new reporting requirements in France were finalised in January 2019, ahead of a 1 March 2019 deadline for employers with more than 1,000 employees. Initiatives are also anticipated in 2019 for Ireland, Portugal, Canada and the Netherlands. This makes it important for multi-national employers to take a global perspective.
The starting point for employers is to identify the reasons behind their gender pay gap. Considerations might include whether there are more men in senior roles, or more women in part-time working arrangements.
Once the reasons behind discrepancies are identified, an action plan should be implemented to address and rectify the pay gap. Recruitment and promotion procedures or succession plans may need to be reviewed, or the use of flexible working or shared parental leave more widely promoted and encouraged.
Bringing employees and, where applicable, trade union or employee representatives into the discussion may not only assist with cultural change, but is also likely to minimise the adverse employee relations impact where a pay gap is reported.
Clare Gregory is an employment partner at DLA Piper