The gender pay gap. Three little words with very big meaning and although it's not immediately obvious which is the most contentious, when you look at the allusion as a whole, it's a sad and sorry affair that we are still talking about it in the 21st Century.
And so, the entire corporate world is waiting, eagle-eyed, for all companies with more than 250 employees, whether private or third sector, to be required to publish the difference between what they pay their male employees and what they pay their female employees. Employment lawyers may be expecting a potential slew of equal pay claims beginning to appear on the horizon, but it doesn't feel like it's going to wipe out the issue for women in the workplace. For real change to occur, it has to be within the commercial sector. If there's nothing to chase, then the hounds won't run. And commercial lawyers know this.
It seems faintly ridiculous that in 2016 a gender bias continues to exist or that legislative powers have allowed this to continue. Forty-six years ago the Equal Pay Act 1970 came into force, making it unlawful to pay different amounts to men and women working the same jobs. Despite this, there remains an estimated 19.2% pay gap between male and female employees according to the Office for National Statistics. It seems commercial employers have been shadowing the murky truth for more than four decades. So, now mandatory pay gap reporting, conferred by sec.78 of the Equality Act 2010, is being implemented, what impact is it going to have on commercial clients and their lawyers?
The answer is, sadly, probably not a lot, certainly at the outset.
First of all, let's look at what employers are actually being compelled to do.
The new rules state that employers of more than 250 staff members are required to publish the mean and median gender pay gap using an hourly rate for each employee, to avoid the information being distorted by the number of hours worked, and this must be maintained for a minimum three-year period. When bonuses apply, the difference between the mean bonuses paid to men and women over a 12-month period must also be published. There can be one overall pay gap disclosed or a more detailed analysis encompassing full time and part time jobs, plus those on a different pay scale or grade.
It sounds like a cast iron method for transparency, doesn't it? So what happens if employers don't comply?
Well, nothing really. At present, there will be no direct sanctions for non-compliance. There's a voluntary option to publish an explanation for any pay gap uncovered, but there are no plans to penalise offenders. Oh, and there's also no requirement for companies to raise women's wages so that they are equal to men's. The only endorsement in place is the rather dubious concept of ‘naming and shaming'. And let's be honest, if their expected ‘embarrassment' can be safely hidden over their moat and behind their drawbridge then it's probably not going to trouble employers, certainly the big ones, that much. As long as they don't publish incomplete or misleading information, which could therefore be used in an equal pay claim, then the potential for loss and damage is relatively small.
Negative implications could exist, of course; if an adverse gender pay gap is revealed, there might be potentially harmful publicity. Perhaps it could cause damage to the reputation of a company, or loss of favour in tendering and contracting cycles. Plus, companies are compelled to publish sensitive financial data, which is bound to make them slightly twitchy, and the likelihood of backdated gender pay claims could be a thorny issue.
While any problems for companies is speculation at present - the regulations are likely to come into force on 1 October 2016, with preliminary data results available by April 2017 - one of the most important elements of the whole pay reporting issue will be that commercial lawyers keep the risks as low as possible for the employer.
In the meantime, commercial lawyers must realise their worth. They must use the time before compulsory disclosure becomes necessary to encourage employers to address any really glaring disparities between gender pay rates. After that they simply have to keep the world of commerce legally ticking over nicely, thank you. While the pay ceiling may still be made of glass in many instances, there is now the chance for it to be smashed for all time and commercial lawyers could well and truly be instrumental in this.
