The Office of National Statistics releases annual statistics on differences in pay between women and men by age, region, fulltime and part time status and occupation, as compiled from its Annual Survey of Hours and Earnings.

As of April 2023, the total gender pay gap was 14.3%. The gap among full time employees increased to 7.7% in 2023, up from 7.6% the previous year. The gender pay gap for part time employees did not change in 2023 at -3.3%.

There remains a significantly higher gender pay gap among employees aged 40 and over compared with those under 40 years. For age groups under 40 years, the gender pay gap for full time employees is 4.7% or below. For age groups of full time employees aged 40 and older the gender pay gap is much higher. The largest gender pay gap is in the age group of full time employees aged 60 years and over, where the gap is 14.2%. A significant reason why the larger pay gap for those aged 40 and over is the smaller proportion of woman in fulltime, higher paid roles.

You can read the report and view the Gender pay gap data here – Gender pay gap in the UK – Office for National Statistics (ons.gov.uk)

For advice on this and other related topics contact our employment law specialist and director Hannah Belton.

On 23 November 2023, the Fawcett Society published its findings in a report, ‘Equal Pay Day 2023: Making flexible working the default’. The report notes that, at the current rate of change, the gender pay gap will not close for another 28 years meaning that woman aged 40 and older will have reached state pension age before this happens.

The report mentions that the types of flexibility available to women, such as part time work and varied hours of work may not reflect true flexibility and can be associated with lower pay and insecurity.  In contrast, men were more likely to have access to more desirable forms of flexible work.

The report suggests that if flexibility was available in workplaces across a variety of careers and taken up by both men and women, this would lower the gender pay gap.

Click here to read more Equal Pay Day 2023: Unlocking flexible work (fawcettsociety.org.uk)

To speak to an employment law expert get in touch.

Amaris Hospitality Limited and The Contact Company Ltd are two of the eight organisations named and shamed by the Equality and Human Rights Commission (EHRC) for failing to report on their gender pay gap for 2022-23.

By law, organisations with over 250 employees are required to annually publish data on gender pay gaps. Failure to report may lead to a warning notice from the EHRC, and ultimately formal action if there are any breaches of equality laws including a court order and an unlimited fine.

Of the 730 employers who received warnings from the EHRC, eight continue to refuse to comply and, have therefore been publicly named and shamed. The Equality Act 2010 (Gender Pay Gap Information) Regulations do not include any civil enforcement procedures however, the EHRC has powers to enforce compliance for example, naming and shaming organisations that do not report on their gender pay gap.

Consulting firm PwC have released figures that show that the gender pay gap has slightly decreased to 13.1% amongst companies who reported for 2020/21, compared with 13.3% in 2019/2020.

For employers who disclosed their gender pay gap reports by the original reporting deadline of 5 April 2021, the gap had decreased to 12.5%.

For employers who disclosed their gender pay gap reports by the extended deadline of 5 October 2021, the gap had risen to 13.1%.

However, since the reporting deadline was changed due to the covid-19 pandemic, and since the pandemic impacted on wages and hours worked, PwC state this could have impacted on the disclosure rate of gender pay gap data. Therefore, comparisons of the data should be treated carefully.

Recent data published by the Official National Statistics (ONS) have revealed that the UK’s gender pay gap, calculated using the median hourly earnings of full-time employees, has fallen to 7.4% from 9% in 2019. Significantly, as of April 2020, female workers earned 92.6% of male employees’ hourly pay. This reduction was reflected across age groups, with the gender pay gap for full-time workers under-40 particularly low at “close to zero”. Interestingly, the most significant reduction in the gender pay gap occurred among managers, directors and senior officials, falling from 16.3% in 2019 to 9.9% in 2020. ONS highlighted the fact that “this occupation group has the highest median pay of any occupation … and therefore has a strong impact on the gender pay gap” overall.

As a result of the disruption caused by COVID-19 pandemic, the Government Equalities Office and the Equalities and Human Rights Commission suspended gender pay gap reporting regulations back in March 2020. Although this data takes furloughed workers’ pay into account, the ONS warned that the impact of the pandemic may not be fully reflected.

ONS: Gender pay gap in the UK: 2020: Differences in pay between women and men by age, region, full-time and part-time, and occupation (3 November 2020)

The Female FTSE Board Report 2020, published by Cranfield School of Management and EY, which looks at trends in female representation on FTSE 100 and FTSE 250 boards each year, has found that the record number of women on boards is failing to translate into genuine equality in senior roles. Despite significant progress in the number of non-executive directors on FTSE 100 boards (where women now account for a record 40.8% of non-executive directors), the increase in the number of executive positions being awarded to women remained “stubbornly low”. Less than one in seven executive director roles (13.2%) were held by women, with women filling just five out of 100 chief executive roles in June 2020.  Women fared worse in the FTSE 250, where they held 11.3% of executive director roles.

COVID-19 pandemic threatens to reverse gender equality progress and notes that the unequal burden of care placed on working women during the lockdown was likely to exacerbate existing gender inequalities and the gender pay gap as the report warns.

https://www.cranfield.ac.uk/som/research-centres/gender-leadership-and-inclusion-centre/female-ftse-board-report

The Fawcett Society and the Global Institute for Women’s Leadership at King’s College London (KCL), which analysed the gender pay gap reporting legislation of ten countries, has revealed in their report that the UK is “unique in its light-touch approach” to tackling the gender pay gap. In particular, the related research highlighted the UK’s failure to require private employers to produce action plans for reducing their gender pay gap, with only one other country, Austria, also not requiring this.

Additionally, the report placed the UK ahead of its peers in terms of transparency and compliance; in 2019, 100% of eligible employers reported their statistics.  Nevertheless, the report did call for the pay gap reporting requirement currently applicable in England, Scotland and Wales to be extended beyond companies with 250 employees or more.

https://www.kcl.ac.uk/giwl/assets/gender-pay-gap-reporting-a-comparative-analysis.pdf

This blog provides an overview of the key policy statements and pledges relating to employment law being made by political parties in the run up to the General Election on 12 December 2019.

 

Conservative Party

 

Atypical working and self-employment

 

• The creation of a single enforcement body.
• Ensuring a harder line is taken when employers abuse employment law.
• Giving workers the right to request a more predictable contract.
• Launching a review to explore how the self-employed can be better supported.

 

Equality and diversity in the workforce

 

• Encouraging flexible working and consulting on making it an employer’s default position.
• Legislating to enable parents to take extended leave for neonatal care.
• Considering how to make it easier for fathers to take paternity leave.
• Extending the leave entitlement for unpaid carers.
• Funding more high-quality childcare before and after school and during the holidays to support working families.
• Publishing a National Strategy for Disabled People before the end of 2020.
• Reducing the disability employment gap.
• Protecting people from physical attack or harassment whether for their sex, sexual orientation, ethnicity, religion or disability.

 

Skills and training

 

• A new £3 billion National Skills Fund to provide matching funding for individuals and SMEs for high-quality education and training.
• Help for employers to invest in skills and consideration of how the working of the Apprenticeship Levy can be improved.
• A proposal to require significant numbers of new UK apprentices for all big new infrastructure projects.
• A reduction in National Insurance contributions for employers if they employ ex-service personnel, as well as a guaranteed job interview for veterans for any public sector role they apply for.
• The creation of two million new high-quality jobs in clean growth.

 

Pay

 

• Freeze the rates of income tax, National Insurance and VAT.
• Increase the National Insurance threshold to £9,500 in 2020, with the overall goal of ensuring that the first £12,500 of a person’s earnings are completely free of tax.
• Improve incentives to attack the problem of excessive executive pay and rewards for failure, and to ensure redundancy payments can be clawed back when high-paid public servants move between jobs.

  

Labour Party

 

Wages

 

• Rapidly introduce a Real Living Wage of at least £10 per hour for all workers aged 16 and over.
• Establish Inclusive Ownership Funds (IOFs) to give employees a stake of up to 10% in their companies.
• Ban unpaid internships.
• Establish an Agricultural Wages Board in England, so every region of the UK is covered.
• Provide a 5% increase in wages for workers in the public sector, followed by year-on-year above inflation pay rises.
• Enforce maximum pay ratios of 20:1 in the public sector.
• Require those earning £80,000 or more to pay a higher level of income tax, while freezing National Insurance and income tax rates for everyone else.
• Require one-third of seats on boards to be reserved for elected worker-directors and give them more control over executive pay.
• Halt the current government’s proposed IR35 changes due to take effect in April 2020.

 

Trade unions and collective bargaining

  

• The foundation of a new Ministry for Employment Rights.
• Starting a rollout of sectoral collective bargaining, bringing workers and employers together to agree legal minimum standards on a wide range of issues, such as pay and working hours, that every employer in the sector must follow.
• The grant of greater freedoms to trade unions, including the removal of restrictions on industrial action.
• Giving greater protection to trade union representatives in the workplace, including strengthening protection of trade union representatives against unfair dismissal and union members from intimidation, harassment, threats and blacklisting.
• A legal right to collective consultation on new technology in the workplace.

 

Self-employment and atypical working

  

• Giving every worker “full rights” from day one of a job.
• The creation of a single status of “worker” for everyone except those who self-identify as self-employed in business.
• Banning zero-hours contracts and introducing regular contracts for anyone working over 12 regular hours in the week.
• Enforcing payment for cancelled shifts as well as proper notice for changes in hours.
• Bolstering redundancy and unfair dismissal protections for all, with extra protection for whistleblowers, pregnant women, those going through the menopause and terminally ill workers.
• Developing tailored support and protections for the self-employed, including collective income protection insurance schemes and better access to mortgages and pension schemes.

 

A green workforce

  

• The creation of one million unionised jobs in the UK as part of the Green Industrial Revolution.
• Launching a Climate Apprenticeship programme to encourage employers to gain the skills needed to work with clean technology.

 

Equality and diversity in the workforce

  

• Creating a new Department for Women and Equalities, with a full-time Secretary of State, as well as a modernised, independent National Women’s Commission.
• Helping people balance work and family life, including by extending statutory maternity pay to 12 months, extending pregnancy protection, doubling paternity leave from two to four weeks and increasing statutory paternity pay, as well as a general commitment to review family-friendly rights.
• Tackling pay gaps, including a commitment to close the gender pay gap by 2030 and to widen and strengthen existing gender pay gap legislation, to extend pay gap reporting to BAME groups and, in companies with over 250 employees, to disabled people, and to impose fines for employers who do not take steps to eradicate pay gaps.
• Strengthening existing disability legislation by introducing new duties including disability leave and creating a code of practice on reasonable adjustments.
• Improving the workplace for women by requiring that all large employers have a menopause policy and flexible working, and enabling positive action for recruitment where greater diversity can be justified.

 

Working hours

  

• Reduce average full-time weekly working hours to 32 across the economy within a decade, without loss of pay.
• End the opt-out provision for the 48 hour working week.
• Set up an independent Working Time Commission to advise on raising minimum holiday entitlements and reducing maximum weekly working time.
• Introduce four new bank holidays to celebrate the four patron saints’ days.

 

Enforcement

  

• Introducing a new, unified Workers’ Protection Agency to enforce workplace rights, including the Real Living Wage and gender pay legislation.
• Keeping employment tribunals free, extending their powers and introducing new Labour Courts with a stronger role for people with industrial experience on panels.
• Defending workers’ ability to recover legal representation costs from negligent employers and keeping the right for workers to be represented and recover their costs in cases of employer negligence leading to injury at work.

 

Systemic discrimination, race equality and human rights

 

• To launch an inquiry into name-based discrimination within the first 100 days of a Labour government. If necessary, the party will consider rolling out name-blind recruitment practices.
• To establish a Race Equality unit within the Treasury to work alongside the new, standalone Department for Women and Equalities.
• To commit the proposed new National Investment Bank to address discrimination in access to finance and take action to ensure that BAME and women business owners have access to government contracts and spending.
• To end charges for passports, visas, tests and other documentation imposed by the Home Office in excess of the real cost of processing these applications.
• To defend the Human Rights Act 1998, incorporate the International Convention on the Elimination of all forms of Racial Discrimination into British law and remain a signatory to the European Convention on Human Rights.
• Through the new Department for Women and Equalities, to develop a cross-party government strategy within the first 100 days of government to end issues of under-representation in all aspects of public life, including a plan for how to ensure increased diversity at all levels (including the judiciary and elected mayors), an urgent review into the implementation of all BAME shortlists and the introduction of unconscious bias training for members of all selection panels.

 

Removing barriers for disabled workers

  

• To start a government-backed Reasonable Adjustments Passport scheme to assist workers to move between jobs more easily.
• To ensure that the new code of practice on reasonable adjustments establishes clearer guidance on what amounts to ‘reasonable’ and includes timescales for implementation of adjustments.
• To introduce equality audits extending to all protected characteristics under the Equality Act and requiring organisations with over 250 employees to report annually on the number and proportion of disabled people they employ, not just on the disability pay gap itself.
• To collaborate with trade unions and employers to raise awareness of neurodiversity in the workplace.
• To expand and evaluate the delivery of the Access to Work support scheme.
• To increase the numbers of disabled trainees included in the Modern Apprenticeship programme and completion rates.

  

Liberal Democrats

 

Modernise employment rights

 

• The introduction of a “dependent contractor” employment status to sit between “employment” and “self-employment”. Workers falling under this label would be entitled to national minimum wage, sick pay and holiday.
• Changing the law so that flexible working is open to all from day one in the job and requiring employers to advertise the job as such.
• Reviewing the tax and National Insurance status of employees, dependent contractors and freelancers to ensure fair and comparable treatment.
• Giving a right to request a fixed-hours contract after 12 months for zero-hours and agency workers.
• Shifting the burden of proof in employment status cases from the individual to the employer.
• Establishing a new Worker Protection Enforcement Authority to protect those in precarious work.
• Expand the rights and benefits available to those in insecure forms of employment, such as offering parental leave.

 

Fair pay

 

• Establish an independent review to consult on how to set a genuine living wage.
• Set the minimum wage for people on zero-hours contracts at times of normal demand 20% higher, off-setting periods of uncertain hours.
• Review the proposals to change the IR35 rules.

 

Diversity in the workplace

 

• Increase statutory paternity leave to up to six weeks.
• Require organisations to publish parental leave and pay policies.
• Aim for women to make up at least 40% of FTSE 350 board members and increase ethnic minority representation.
• Extend pay gap reporting to include BAME and LGBT+ figures and generally to develop a government-wide plan to tackle BAME inequalities.
• Review funding of the Equality and Human Rights Commission to ensure that it is adequate.
• Reform the Gender Recognition Act 2004 to remove the requirement for medical reports and formally recognise non-binary gender identities.
• Outlaw caste discrimination.

 

Skills development

 

The party has proposed the introduction of a Skills Wallet, giving every adult in England £10,000 to spend on education and training. Employers will be expected to contribute funds. As well as this, the apprenticeship levy will become a wider-reaching “Skills and Training Levy”, with 25% of the funds raised going into a “Social Mobility Fund”.

 

Ethical use of new technologies

 

• The introduction of a Code of Ethics to ensure that the use of personal data and artificial intelligence is unbiased, transparent and accurate, and respects privacy.
• Convening a citizens’ assembly to determine when it is appropriate for the government to use algorithms in decision-making.

 

Corporate governance

  

• Giving staff in listed companies with more than 250 employees a right to request shares, to be held in trust for the benefit of employees.
• Strengthening worker participation in decision-making, including staff representation on remuneration committees, and requiring all UK-listed companies and all private companies with more than 250 employees to have at least one employee representative on their boards with the same legal duties and responsibilities as other directors.
• Reforming fiduciary duty and company purpose rules to ensure that all large companies have a formal statement of corporate purpose, which will give consideration to employee welfare, environmental standards, community benefit and ethical practice, alongside benefit to shareholders, and that they report formally on the wider impact of the business on society and the environment.
• Requiring a binding and public vote of shareholders on executive pay policies.

Hilary Spencer, the director of the Government Equalities Office, has announced that gender pay gap reporting will be established for little companies. The action was proposed in 2017 and companies with at least 250 employees must publicise their gender pay gap figures. Mr Spencer indicated that there may be further developments before the review in 2022, such as, requiring smaller companies to publicise their figures. This is as a result of the Trades Union Congress focussing on the need for companies to lessen their figures, to show that they are actively engaging in reporting, rather than doing so purely to conform with the requirement.

Below we take a look at some significant changes expected in employment law in April 2019. 

Gender pay gap report

Employers with 250 + employees must report on their percentage gender pay gap annually.  Many will remember the headlines last year such as “Virgin Money reports a 36% gender pay gap”. 

The deadline for private sector companies to publish their reports is 4 April, so we wait to see whether companies are reporting a narrowing gender pay gap or whether or not it has in fact widened.

Wages

The new national minimum wage rates that apply from 1 April are as follows:

• Workers aged 25 and over – £8.21 an hour (National Living Wage)
• Workers aged 21-24 – £7.70 an hour
• Development rate for workers aged 18-20 – £6.15 an hour
• Young workers rate for workers aged 16-17 – £4.35 an hour
• Apprentice rate (workers under 19 or in first year of apprenticeship) – £3.90 an hour.

Payslips

Two important changes will come into force on 6 April:

• Where people’s pay varies according to the number of hours worked, employers must include the total number of hours worked on the payslip.
• Payslips must be given to ‘workers’ and not just employees.

Pension

Currently, automatic enrolment requires employers to contribute a minimum of 2% of an eligible worker’s pre-tax salary to their pension pot, with the individual contributing 3% themselves.

However, from 6 April employers and employees will now have to contribute a minimum of 3% and 5% respectively.

Statutory pay

The weekly amount for statutory family pay will increase to £148.68 from 7 April. This rate will apply to maternity pay, adoption pay, paternity pay, shared parental pay and maternity allowance.

The weekly rate for statutory sick pay will increase to £94.25 from 6 April 2019.

 

For more information please contact Hannah Dahill, Associate Director, on 01267 493130 or email [email protected].

 

 

The shadow minister for Women and Equalities, Dawn Butler has revealed that Labour plans to give workers a day one right to select their working hours.

 

Labour wishes to encompass job sharing, working from home, part time, annualised, compressed and flexi time. The announcement comes as part of a greater plan to create a presumption in “favour of flexible working,” forcing employers to design a potential for people to work flexibly when creating roles.

 

It is argued that this approach is essential to closing the gender pay gap and dismantle the structural barriers that imprison women form promotion or progression.

 

This area is continually being discussed by the Government, Theresa May believes that jobs should be advertised from day one as flexi unless “a solid reason” can be justified.

On 2 August 2018 the House of Commons Department for Business, Energy and Industrial Strategy (BEIS) Committee published a Gender Pay Gap Report as the first tranche of the Committee’s inquiries into aspects of executive pay and gender pay gap in the private sector. The Government has recently responded to the report which has now been published.

 

Firstly, the Government will not be extending the gender pay gap reporting obligations to companies with 50 or more employees, despite, the Government being enthusiastic in the encouragement for smaller companies to strive for fair representation of men and women at all levels and pay grades, the Government refuse to make it a requirement.

 

Secondly, the Government is keen for all employees to produce an action plan in future reporting years are being encouraged to publish their plans (which is central to Government Equality Office work). However, the Government refuses to make this a mandatory obligation and would rather allow employers the freedom to produce an action plan that is relevant to each situation to truly commit and embrace the issues.

 

Furthermore, partner remuneration was recommended as an inclusion in the central figures, currently partners in traditional partnerships and LLPs are excluded. While the Government welcomes organisations voluntarily publishing their data the Government do not accept the recommendations. Acknowledging that it will review the situation in future and the possible introduction of a voluntary reporting methodology.

 

Recommendations to amend regulations to include tenths rather than quarters in order to engage a more nuanced analysis and require employers to show part-time and full-time gender pay gap statics separately. The Government has again not accepted these amendments as they wish to consult with employers and membership bodies first.

 

The Government were asked in the report to clarify areas of ambiguity and publish fresh guidance on areas such as; how bonus figures are calculated. However, the Government have declined on creating new guidance on the basis they continually assess the current guidance jointly provided by ACAS and Government Equality Office and are content with their stance on this.

 

Moreover, the report acknowledged the possibility of extending the collection and reporting of pay gap data to include disability and ethnicity, in time for a 2020 publication. A Government consultation is already underway in respect of ethnicity, but no timeline has been set. The Government has set out plans to establish a framework for voluntary reporting on mental health and disability for larger employers. But no claim for a mandatory requirement on a business.

 

The Government are happy with EHRC enforcement strategy, providing enough certainty to employers in terms of non-compliance consequences. Positively 100% employees who fall under the category have published their information.

 

Clearly, there is no appetite for the Government to make changes to the gender pay gap reporting regime after just one full cycle of reporting, especially as employers are still getting used to this new regime. It looks more likely that if any changes were to take place it will be in 5 years when it is scheduled to be reviewed.

A survey of 2,515 employees by the Equality and Human Rights Commission (EHRC) has revealed that 61% of women take an organisation’s gender pay gap into consideration when applying for jobs. The survey also demonstrated that 58% of women would be less likely to recommend an employer if it had a gender pay gap.

The survey was commissioned to identify whether gender pay gap information has an impact on the motivation and behaviour of staff. The results of the survey indicate that companies with a smaller gender pay gap will benefit from a broader range of talent.

The EHRC Chair has commented that “it is crucial that all employers think seriously about the issue and demonstrate to their workforce that they are committed to closing the gender pay gap”.

On 2 August 2018, the House of Commons Business Energy and Industrial Strategy (BEIS) committee published a report on gender pay gap reporting, this is the first report into an inquiry launched back in March 2018.

The report shows that while gender pay gap average is at 18% nationally, in some organisations it is as high as 40%. Several recommendations were made to reduce the gap such as reporting to include a narrative explanation for pay disparity.

Whether these recommendations are in fact implemented by the government is one thing, but, there is no denying, the calls are growing rapidly for the gap to close.

The Equality and Human Rights Commission (EHRC) began its investigations into employers who failed to comply with their gender pay gap (GPG) reporting obligations in June. Approximately 1,500 companies missed the deadline and were provided with 28 days from 9 April to comply or face further action. The EHRC have stated that those employers who do not report their data within 28 days of receiving a notification from the EHRC will face further action, which could include written agreements, unlawful notices and unlimited fines. The EHRC could name and shame employers that reach the investigation stage by uploading the results of investigations online which will be available to members of the public and the media.

More than 400 organisations have since either reported their data or confirmed that they do not come under the regulations. Those that have not complied will be investigated to ascertain if they have committed an unlawful act and if so may face a fine.

A recent study undertaken demonstrates that 17% of employers may have incorrectly reported their gender pay gap figures following the requirement for companies with 250 or more employees to report from April 2017.

Figures suggest that the inaccuracies include:

• A gender pay gap over 100%
• Misuse of positive and negative %
• A median pay gap of 0%.

The study concludes that the government guidance in relation to gender pay gap reporting was ambiguous and so led to the above inaccuracies.

 

The BBC have revealed that in the past year they have reduced their median gender pay gap from 9.3% to 7.6%, which demonstrates that the Company is on it’s way of achieving their goal of eliminating the pay gap by 2020. The reduction is as a result of:

• Redesigning roles
• Altering salary bands
• Responding to each individual staff complaint
• Taking steps to eliminate the issue of female staff being paid less than men of similar roles.