New government regulations, set to be introduced from April 2017, require businesses with more than 250 employees to publish data relating to the pay of their male and female staff members.
While figures aren’t to be published until April 2018, businesses are being urged to act ahead of time in order to be prepared for mandatory reporting.
The UK is currently facing a national pay gap of 19.4 percent, with the UK government hoping the new legislation will force businesses into closing the gap once and for all. Despite the fact that steps were initially taken to close the gap through the 1970 Equal Pay Gap and 2010 Equality Act, it seems another attempt needs to be made by businesses to ensure pay equality is present throughout the workplace.
The gender pay gap is a big deal. It has the potential to portray you as a business who fails to recognise the value of employees equally causing disruptions internally, as well as in the eyes of the watching media.
So, what can your business do to prepare for pay gap reporting? Here’s six essential steps you should be following.
Let’s begin with what you need to know.
Both equalities acts define equal works as; ‘like work’, ‘work rated as equivalent’ and ‘work of equal value’, and deem that employees have the rights to receive the same level of pay as someone performing work of equal value.
Employers are therefore required to measure and report on any data relating to employees pay. This includes pay, as well as extra benefits such as bonuses, car allowances etc. However, the latter are to be measured separately.
While, legally, the legislation only requires businesses with more than 250 employees to publish data, it can still be an advantage for smaller businesses to measure pay gaps which exist.
Evaluate Current Roles
As we mentioned, ‘like work’ is the best term to describe roles which should have the same pay grade. However, just because work isn’t deemed identical, it doesn’t mean that employers should be more favourable to one sex than the other.
Therefore, it can be beneficial to evaluate any inequalities in job roles between different sexes before you go on to assess pay gaps in the company.
Assess Your Current Pay Practices
With gender pay under the spotlight, now is as good a time as any to assess your current pay practices. Spend time gathering insights on pay grading, bonuses, job evaluation schemes, payroll and HR systems.
Consider what would make your business able to assess employees more effectively and efficiently. Is there a new system you require? What could you change as an employer to manage staff better? Now is the time to ask yourself some key HR questions, before mandatory reporting comes into effect.
What’s Creating Gaps?
Once you’ve concluded your pay audit, you’ll then need to determine the causes of any gaps which occur and assess whether gender is the reason. It’s important to remember that while gaps may occur, they may not necessarily be gender related. However, you will need to ensure you can justify such gaps and prove they aren’t to do with gender.
Look at the salaries given to employees on entry to the organisation, and where they are now. How do they compare to other members of staff? Your goal is to provide pay equality throughout your organisation.
Develop an Equal Pay Plan
You’ve found the pay gaps and determined the cause; now it’s time to create a plan of action to get rid of pay discrimination in your business. The obvious way is to start by ensuring employees who have the same role or complete ‘like work’ are paid the same salary.
You could also look to address other employee benefits such as offering flexible working opportunities, improving parental leave pay, extending part-time opportunities. It could also be a good idea to address gender stereotypes when recruiting for specific roles.
Throughout the process, it’s essential you are as transparent as you can be with your employees. This means that all employees should understand your pay and benefits systems. You should certainly avoid using any systems or policies which could cause misunderstandings.
As such, it’s beneficial to have one set pay and benefits policy for all staff members. Introducing different systems for senior employees can reduce transparency and cause further inequalities to occur.