Equal Pay Day throws gender pay gap into the spotlight

This year, Equal Pay Day falls on Friday 10 November, which signifies the date of the year on which, as the gender pay gap reveals, women effectively stop earning in comparison to men.

The gender pay gap continues to hit the headlines. This summer saw female presenters at the BBC calling on the broadcaster to address pay inequality, and there is an ongoing equal pay claim by female employees of ASDA that their role should attract an equivalent salary to male employees working in the supermarket’s warehouses.

Under the new gender pay gap reporting rules, UK employers with 250 or more employees are now required to publish figures annually to show the gender pay gap in their workforce. The first reports are due by 4 April 2018, and it is anticipated that employers will need to be prepared for potential repercussions as the transparency around pay greatens.

It is almost certain that this increased transparency will lead to a greater demand for explanation. This, in turn, may be followed by an increase in the likelihood of grievances or potential equal pay claims.

So how can employers prepare for this? Communication will be key. An employer’s acknowledgement and explanation for the gap will be crucial, as will its suggested measures to reduce the gap in the future. It is important to acknowledge that a gender pay gap does not automatically mean there is pay inequality. There may well be very genuine reasons behind the gap, but these will only stand up if they are clearly and rationally explained to staff and the public.

We suggest that, whether a business is required to publish its gender pay gap or not, it is helpful to analyse its workforce and identify if a gender pay gap exists. This will help to reveal those areas of the business at risk of a potential claim or grievance. Once this analysis is undertaken, it is then possible to consider measures that can be taken to help reduce pay gaps in the future.

If a gap exists, it is sensible to be transparent and honest about the reasons for its existence, and even if measures to address the gap need to be implemented over a long period of time, it is important that they are communicated to staff at the outset. A considered, open and honest approach, combined with a plan for tackling the issue, is far more likely to encourage the buy-in of affected employees and reduce the risk of adverse PR and of potential claims.

Matthew Clayton heads up our Legal 500-rated employment team. He handles the full range of contentious and non-contentious employment law issues for a client base which includes multi-national companies, owner-managed businesses and not-for-profit organisations. His particular specialisms include complex staff restructurings and employment issues concerning business transfers. He is a member of the Employment Lawyers’ Association, and a GL Ambassador for GFirst LEP.