Are you ready for the new gender reporting requirements? Shivani Smith and Kate Stephens from NFP Consulting explain what it means for you and how to get prepared.
Charities have the worst gender pay gaps
The voluntary sector works tirelessly for social change, progress and welfare. Which is why it is surprising, disappointing and unacceptable that it has such a poor record in gender pay equality. The gender pay gap is worse in charities compared to the national average for all sectors and has in fact doubled over the past two years.
This is despite the fact that women are over-represented in the voluntary sector, especially in the comparatively lower paid health and social care sectors. Women make up 68% of the workforce, compared to 40% in the private sector, but only 43% of chief executive and chair of trustees positions. This falls to 27% in charities with a turnover of over £10 million.
Gender reporting requirements
Employers in the private and voluntary sectors with 250 or more employees will be required to publish details of pay audits, which will reveal any gender pay gaps within their organisations. This requirement was due to go live this spring and the sector was under-prepared for what was a ticking time bomb. Now, with the recently announced delay until 2018, organisations have the opportunity, and the time, to get their house in order instead of a last minute rush. There is now no excuse for charities to not just put in place the mechanisms to report, but also to start addressing the barriers women face in the workplace.
The government has published details of its proposals which require employers to publish gender pay gap information from April 2017. This is subject to consultation and the consultation period closes on March 11th. To contribute, please click here. The final form of the regulations will come into force in October 2016 with the first set of data to be published no later than 30 April 2018.
- Organisations will be required to publish five sets of data:
- The gender difference in mean hourly pay
- The gender difference in median hourly pay
- The gender difference in mean bonus pay during the year prior to the relevant date
- The proportion of male and female employees who received bonus pay during that period
- The numbers of male and female employees in quartile pay bands
Employers will be encouraged to provide a narrative around the reasons for any pay gaps.
The results will need to be shared with the government and also published on a public website and kept there for three years.
Reputational risks of non-compliance
The reporting requirements currently come with no civil or criminal penalties, although this will be kept under review. Instead, the policy makers are relying on highlighting best practice and the risk of brand and reputational damage to organisations who either fail to comply or perform badly. After a year of negative headlines, charities are under scrutiny like never before and so the ‘name and shame’ league tables of the reporting structure could have serious repercussions.
The Charity Finance Group has called for the government to recognise the capacity issues that charities in particular face and provide additional support to charities on issues such as training and pay audits, staff consultations and toolkits. The group is also arguing for the scope of the requirements to include all employees. The current threshold of 250 + employees would automatically exclude most charities and therefore not benefit the vast majority of women working in the sector. This may or may not happen, but it is still a good reminder to all organisations to examine and address the gender pay gap in their own organisations, regardless of legal requirements.
How can you prepare?
It will take time and commitment to close the pay gap. But it’s not something organisations of
any size can ignore or avoid any longer, regardless of the deadline.
These are the five steps organisations can follow to start addressing the issue.
1. Gather information: carry out an equal pay audit
2. Determine which jobs are equal: Identify where women and men are doing like work - work rated as equivalent, or work of equal value
3. Collate and compare pay information to identify any significant pay gaps
4. Determine and assess the reasons for pay gaps and decide whether or not those reasons would amount to a legal justification for the difference in pay
5. Develop an action plan to deal with what the audit has revealed
For more information on the gender pay audit, further links and additional detail on the steps listed above, please email Victoria Stickler on email@example.com quoting ‘GPG’ in your subject line.