Now that the dust has settled on the first gender pay gap reporting deadline, HR professionals could be forgiven for breathing a sigh of relief that the storm has passed, hopefully with little damage. Certainly, the thousands who adopted the tactic of waiting until the last minute to publish may have successfully avoided the intense media scrutiny to which some high profile early disclosers were subjected. However, it would be unwise to put gender pay to the bottom of the to-do list just yet.
Employers which met this year’s deadline are not necessarily out of the woods. Media headlines have highlighted improbable statistics in some reports, including zero mean and median pay gaps and exact 50:50 gender splits in each of the pay quartiles. According to the Financial Times, over 200 employers in this position have since corrected their published data; others in a similar position may want to check their calculations, at the very least. The Equality and Human Rights Commission has stated that it has the means to identify employers that submit statistically improbable data, and will consider taking action against them where it is reasonable and proportionate to do so.
Of course, the commission’s main focus is likely to be on the 1,500 or so organisations that missed the deadline. The commission’s published enforcement strategy set out its intent to write to those organisations on 9 April, giving them 28 days to comply with the obligation, or, presumably, explain to the commission’s satisfaction why they are not within scope. Although there is some controversy as to whether the commission actually has the necessary powers, it has stated that non-compliance will be followed by an investigation and potentially an unlawful act notice, and ultimately court action to impose unlimited fines. Certainly, a few employers have seen fit to publish their data post deadline, as the number of reports has continued to creep upwards.
Employers should also prepare for a possible increase in grievances from employees about their pay. HR may need to remind line managers about how to handle grievances or requests for pay information, and that it could be unlawful to subject employees to detrimental treatment, either because of raising such concerns or because they have discussed their pay in breach of pay secrecy clauses.
And, perhaps most importantly, employers should not forget that a fresh round of pay data needs to be collected with a view to publication by next April. Next time around there will inevitably be more pressure to show both improvement in the figures and greater efforts to bring about change. Setting out clear goals and practical steps to achieve organisational change, and reviewing their effectiveness, is key to convincing current and future employees, as well as the media, that employers are taking the issue of gender pay seriously.
Promoting more women into the senior ranks is likely to be a key goal for many, as is trying to encourage a more flexible working environment for all employees and a more even sharing of parental leave in an attempt to reduce the motherhood pay penalty. Indeed, encouraging men in senior roles to work more flexibly might be one way of freeing up some senior positions for women. So far, the government has openly supported these ideas but stopped short of legislating; this could change if insufficient progress is made over the coming years. More likely in the short term are changes to extend the duty to smaller employers and cover data broken down by ethnicity. What is clear is that the issue of gender pay is not going to go away any time soon.
Joanna Mason (pictured) is senior associate and Anna Henderson is professional support consultant, in the employment, pensions and incentives team at Herbert Smith Freehills.