Is your business fully prepared for the impact of Gender Pay Gap reporting and legislation?
For many HR professionals, this question has never been more important. With Gender Pay Gap reporting legislation on the horizon, and the recent furor over the BBC’s pay report findings, many businesses are understandably concerned as to the legalities surrounding this issue.
The BBC pay report caused widespread outrage when it was published last week, revealing ‘glaring discrepancies’ amongst the salaries of talent earning more than £150,000. The report, which revealed gaps between the pay of males and females in equally comparable roles, also highlighted four key areas of concern for HR professionals to be mindful of:
Females comprised only a third of the staff named in the report, with the highest-earning man earning more than four times the salary of the highest-earning woman. The lack of diversity continued beyond gender, with a distinct lack of black, Asian and minority ethnic background (BAME) individuals featured anywhere within the report.
When compiling information for Gender Pay Gap legislation, HR teams should be mindful to keep a close eye on both sex and race representation across all levels of business. Assessing your existing Inclusion and Diversity policy, and whether it is fit for purpose, could also help with levelling out any under-representation amongst certain groups in the future.
As stated, the report highlighted a deep divide between pay for men and women, but experts have also warned that some discrepancies are more problematic than others, and could easily lead to equal pay disputes.
Matthew Ferro, reward consultant at Paydata, said: “If the BBC hasn’t got a legal argument to explain why one presenter earns more than another, they could have an equal pay issue on their hands.”
HR teams need to be mindful that any employees in ‘comparable roles’ are legally entitled to equal pay, and that Gender Pay legislation will require significant reporting on backgrounds, skillsets, abilities and experience to fully justify any pay differences within this scenario.
Rumours have surfaced that, in a bid to ‘equalise’ pay, the BBC may resort to cutting salaries amongst their highest paid male staff. However, legally, this could prove to be an unwise move.
Jane Crosby, employment lawyer at Hart Brown, commented: “Cutting salaries would have to meet with the male employees’ agreement, as changing contracts unilaterally, without an agreement, could result in further legal claims from those involved.”
It would be wise for businesses with a large proportion of higher-paid male staff to treat this situation as a ‘lesson,’ and to pay attention to any scenarios where equal positions have differing rates of pay. Conducting a review of any existing pay bands, gradings or benchmarking processes, and pinpointing areas of difference, could also help with preparing for reporting on Gender Pay differences.
Following the widespread ill-feeling towards the BBC’s findings, it would be wise for HR professionals urged to keep an eye on their organisation’s pay differences, or face a potential backlash, both amongst business contemporaries and potentially in the press. Whilst businesses with less than 250 employees will not be required to report on Gender Pay, adopting the principle of greater transparency around high pay can only be a good thing. After all, it is likely that greater awareness around gender equality will see many organisations have to justify how their people are rewarded and why.
Takeaway tips for HR compliance with Pay Gap legislation: