Paul Kelly: The importance of gender pay gap reporting for businesses

gender pay gapThe government’s latest pay gap report, HMRC gender pay gap report 2021, which was published on 27 January 2022, revealed that in 2021, women earned 90 pence for every £1 earned by a man. Following this, there is increasing pressure for employers not just to report the numbers but instead understand the reason for the gap.

The gender pay gap is the difference between average male and female pay within individual organisations and across the UK as a whole, this is normally expressed as a percentage. The reporting rules were introduced by the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017, and from 6 April 2017, businesses with 250 or more employees have been legally required to display the gaps in earnings between men and women in a bid to reduce the 17.9% average difference that existed.

Transparency from businesses is vital to achieve gender equality within the workplace. Businesses should aim for equal pay, equal treatment, equal access and equal representation.

In May 2019, 47 employers were named and shamed by the Equality and Human Rights Commission for failing to submit their gender pay reports within the deadline. It is now a legal requirement for all affected employers to report and publish their gender pay gap information.

Businesses must identify if they are required to report and which employees they must include, alongside their reporting deadline, and understand how to provide a supporting narrative. Finally, employers must gather gender pay gap data and submit their calculations within one calendar year of their snapshot date.

As well as simply reporting on their gender pay gap, employers are encouraged to use this process to put in place an action plan to not only reduce pay disparity between men and women, but to improve the recruitment, retention and progression of women in the workplace.

Paul Kelly is head of employment law at Blacks Solicitors