Over half a century after pay discrimination became illegal in the United Kingdom, a persistent pay gap between men and women continues to hurt our nation’s workers and our national economy.
Women working full time in the UK are still paid on average less than men in equivalent roles. The consequences of this gap in wages affects women throughout their lives. The pay gap even follows women into retirement because lower lifetime earnings often means they will receive less in pensions.
But what exactly is the gender pay gap and how can employees and employers deal with it. Let’s discuss in our ultimate guide to the gender pay gap in the UK.
What is the gender pay gap?
The gender pay gap is the difference in average hourly earnings between men and women. It is caused by a range of complex, inter-related factors including:
- Occupational segregation (where men and women do different types and levels of work)
- Lack of flexible working opportunities
- Discrimination in pay and grading structures.
These three causes are common across all workplaces and sectors.
Is the gender pay gap the same as equal pay?
The gender pay gap is not the same as equal pay, although unequal pay between men and women is a major cause of pay gaps at the business level. Equal pay law covers the concept of equal pay for equal work, making it unlawful to pay a woman less than a man (and indeed vice versa) for the same job or jobs of equal value. Tackling equal pay alone is not enough to close the gender pay gap.
What does the law state about gender pay in the UK?
The Gender Pay Gap Regulations, otherwise known as the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 came into force in the UK in April 2017. The regulations require all private and voluntary-sector employers with 250 or more employees to publish data on their gender pay gap. Broadly similar rules apply in the public sector under the Equality Act 2010 (Specific Duties and Public Authorities) Regulations 2017.
By law, men and women must get equal pay for doing ‘equal work’ (work that is considered as the same, similar, equivalent or of equal value). This means someone must not get less pay compared to someone who is both:
- The opposite sex
- Doing equal work for the same employer
Does the regulation cover just basic salary?
No. Equal pay law applies to pay and terms and conditions of employment, including:
- Basic salary
- Basic wages
- Working hours
- Annual leave allowance
- Holiday pay
- Overtime pay
- Redundancy pay
- Sick pay
- Performance-related pay, for example a bonus that’s in the employment contract
- Benefits, for example gym membership or a company car
Who has a right to equal pay?
Equal pay applies to:
- Agency workers
- Full-time, part-time or temporary contracts
- Self-employed people who are hired to personally do the work
This is regardless of sex, age, race or religious beliefs.
What counts as equal work?
By law, ‘equal work’ counts as either:
- ‘Like work’ – work where the job and skills are the same or similar.
- ‘Work rated as equivalent’ – work rated as equivalent, usually using a fair job evaluation. This could be because the level of skill, responsibility and effort needed to do the work are equivalent.
- ‘Work of equal value’ – work that is not similar but is of equal value. This could be because the level of skill, training, responsibility or demands of the working conditions are of equal value.
Some jobs can be classed as equal work, even if the roles seem different. For example, a clerical job and a warehouse job might be classed as equal work.
Are there any situations where a gender pay gap is allowed?
Differences in pay and other terms and conditions might be allowed in some circumstances. For example, it might be possible for someone to be paid more than someone of the opposite sex who does similar work because:
- They’re better qualified. This can also apply if their skills are crucial to the job and hard to recruit.
- The location of the job. This can be, for example, in places like London where the cost of living is higher.
- They work night shifts, and the employer can prove that they can only cover night shifts by paying staff more.
The reason for the extra pay must have nothing to do with the worker’s sex.
What is Gender pay gap reporting?
The ‘gender pay gap’ is the difference in average earnings between women and men. Employers with more than 250 staff must report their organisation’s gender pay gap to be viewed by potential employees, people in authority, and the public in general.
What information do employers have to report on in their Gender Pay Gap reports?
The information must be published on both the employer’s website and on a designated government website.
The 6 key data that needs to be reported are:
- Average gender pay gap as a mean average
- Average gender pay gap as a median average
- Average bonus gender pay gap as a mean average
- Average bonus gender pay gap as a median average
- Proportion of male and female employees receiving bonus payments
- Proportion of male and female employees by quartiles
What is the purpose of gender pay gap reporting?
The purpose of gender pay gap reporting is to highlight discrepancies within companies and allow potential employees and the public at large to see how close the pay gap is within a business.
It is there to force companies to take action to reduce the pay gap between men and women and look at ways to ensure fairness and equality in their pay structures.
As an employer, can I get into trouble for having a gender pay gap?
Yes, you can, although having a gender pay gap in itself is not a crime. There may be legitimate reasons why the men and women in your organisation are paid differently.
What is important for all businesses is that they ensure that they do not discriminate individuals based on their sex by paying both men and women the same rate if they do the same role. If they fail to do this, they could be taken to tribunal.
The gender pay gap has been a sore point in the workplace for many years. Things are improving and the law is evolving to deal with it.
We hope you have enjoyed our guide.