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.
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.