UK government publishes new guidance to help close gender pay gap

Out-Law News | 14 Feb 2019 | 12:00 pm | 2 min. read

The UK government has released guidance aimed at helping employers close the gender pay gap (GPG), ahead of the deadline for the second year of gender pay reporting.

The guidance (15 page / 374KB PDF) focuses on eight potential causes of a gender pay gap and suggests ways that employers could act to close it.

The Government Equalities Office (GEO) has also published a four-step guide (7 page / 288KB PDF) to help companies develop an effective GPG action plan, encouraging employers to work with staff to take action.

The eight possible reasons for a GPG identified by the government include organisations’ seniority structures. The guidance recommends that companies should look at pay by job types, departments and the way a company is structured as well as dividing gender pay into quartiles as required by the gender pay gap reporting legislation.

It suggests that companies should look at whether there is a gender imbalance within internal promotions, and identify ways to encourage women to apply for higher grades. It also recommends that employers need to look at their recruitment and attrition at all levels, as more women at a junior level will impact the overall GPG.

Companies need to look at whether starting salaries and bonuses differ by gender, and introduce transparent processes for setting salaries if a gender imbalance is identified.

The guidance also recommends companies should examine whether men and women receive different performance scores on average. If so, suggested ways to solve the problem include making sure men and women are given equal resources for development, and removing self-assessment if it is causing gender imbalance.

More flexible working patterns, particular at senior level, are recommended as well as the need to support both men and women to take on caring responsibilities.

Employment law expert Helen Corden of Pinsent Masons, the law firm behind, said: "While many employers will already have focused on some of the questions identified, for example those relating to seniority levels and what steps are being taken to support part-time workers and those with caring responsibilities, the other questions raised may be more thought provoking and encourage employers to undertake a deeper dive into the causes of the gap within their organisation."

"For example, many employers will not yet have looked at average performance scores or the rates at which men and women leave the organisation," said Corden. "This guidance may therefore provide them with more food for thought in relation to additional investigations that they can undertake and provide ideas for further measures to implement."

In the four step guide the government suggested that companies should analyse data and identify actions to take; consult and engage with a wide range of stakeholders within the business; revise any action plan to resolve a GPG, and allow enough time for changes to take effect.

The GEO also released new research which found that more companies have prioritised reducing their gender pay gap since the introduction of GPG legislation in 2017. More than two-thirds (69%) of employers now view closing the pay gap as a high or medium priority, an increase of 8% on last year.

A similar proportion (67%) of businesses were discussing ways to close the pay gap at board level.

The GPG reporting regulations came into force in April 2017 and require private and voluntary sector organisations with 250 employees or more to publish GPG data for their organisation. Similar requirements apply to public sector employers.

Employers must publish updated GPG reports by 4 April 2019, based on figures as at 5 April 2018.

Last month the government confirmed it was not planning to make any changes to the GPG reporting rules ahead of the 2019 deadline, despite a committee of MPs recommending a number of enhancements and extensions.