Last year we reported that the Equality and Human Rights Commission
(“EHRC”) had been asked by the Government to review private sector pay
arrangements in an attempt to increase transparency in the area of pay
and narrow the pay gap between men and woman (see Related Article
below).

Following consultation the EHRC has published its proposed measures
which, although voluntary, it regards as being the first step in
tackling the gender pay gap.

The proposals centre on the idea that employers should analyse and
record pay information using one or more of the following quantitative
measures of pay differences:

• ‘the single figure’ difference between the median hourly earnings of
  all male employees and  the median hourly earnings of all female
  employees in the organisation.
• the difference ‘by grade and job type’ between the average basic pay
  and total average earnings of men and women.
• ‘Starting salaries’ and the differences between these for men and
  women.

The proposals also include a ‘narrative’ approach, intended to be
used in conjunction with one of the three quantitative measures and
which would detail the context of any pay differences and seek to
investigate and explain the reasons behind these.

Commentary

The EHRC has stated that it is “encouraging voluntary reporting
straight away for all employers”.  Following the publication of
additional guidance in April 2010, the EHRC has also confirmed that it
intends to “capture its own data and will feed this in to our first
monitoring report in November 2010.”  Monitoring in 2010 will focus
initially only on the “take-up of the metrics” by those with 500 or more
employees, before including employers with more than 250 employees in
2011.

Trevor Phillips, chair of the EHRC, commented that: “transparency is
really the first step to addressing the gender pay gap…Those that
take up these measures will receive some immunity from our investigative
powers.  I hope this incentive combined with the goodwill and
commitment shown by our partners so far means that we can deliver high
levels of participation on a purely voluntary basis, ensuring that
gender pay transparency will become normal business practice.”

The Equality Bill currently going through Parliament contains a
clause enabling the Government to introduce regulations to force private
sector employers with more than 250 employees to publish information on
pay between the genders.  However, the Government has confirmed its
intention not to issue such regulations unless the voluntary measures
set out above do not achieve the desired progress, with a review date of
2013.

Related Articles

Consultation on gender
pay reporting in the private sector – a first step before mandatory
reporting

Resources

Proposals
for measuring and publishing information on the gender pay gap

For further information or to discuss the issues raised, please contact
Colina Greenway (colina.greenway@abbisscadres.com)
on +44 (0) 203 051 5711.