FPSW has responded to the Government's consultation on the Regulations needed to implement Section 78 of Equality Act 2010, which would require some employers to publish their gender pay gap.
Completion of the on-line form was based on the evidence and calls for action in the SW Women's Manifesto 603 KB. In addition, FPSW sent a supplemental letter into the consultation which said:
I have today submitted the response of Fair Play SW to the Gender Pay Gap Consultation. This email provides some supplemental information which it was not possible to include fully on the form.
Fair Play South West (FPSW) is the gender equality network for the whole of the south west of England, spanning Gloucester to Cornwall to Dorset and Wiltshire. This is a mainly rural part of the country but includes the urban centres of Bournemouth and Poole, Plymouth, Bristol and Swindon. We are a voluntary network of women’s organisations and individual women and men who support the aim of women’s equality, including their position in the economy. We are run by an informal Board of volunteers and have no paid staff, though many of our member organisations do. We work by gathering the views of women across the region through running events and surveys and representing these views to policy makers and delivery organisations both locally and nationally. We also campaign on issues raised with us and cooperate with academia in conducting research on issues and potential solutions. For example, the evidence based SW Manifesto for Women was sent to the GEO earlier this year.
We understand that “the Gender Pay Gap” is a symptom of a number of issues for women in improving their position in the economy and is a valuable measure of progress in women’s equality. However, its value as a single number is limited without further analysis to understand its causes; this analysis should be done at a national and local level, but understanding and progress will be significantly enhanced by the introduction of such analyses at the organisational level. We have experience of assisting organisations with their pay gap analyses and find that the processes tend to be simple, particularly for organisations with an established payroll system and a well thought through grading structure. Organisations find that understanding and correcting their pay gaps are considerably enhanced by help from voluntary sector experts who have heard the voices of ‘ordinary’ women. I reproduce below some reflections on our experience which I hope you find helpful.
Chair, Fair Play South West
It is well known that the gender pay gap is under reported by quoting just median pay for full time workers because:
a) The part time pay gap is MUCH bigger, even if using only the median;
b) More women than men work part time;
c) The 50% of men or women earning less than the median are not evenly distributed within that 50% band, women tend to be at the low (minimum wage) end, whereas men tend to be clustered at closer to the median;
d) The 50% of women or men earning more than the median are also not evenly distributed, with women closer to the median and more men earning towards the top end of the range. See: here for graphical distributions.
It is also well known that the causes of the gap are several, including:
a) Illegal pay discrimination between women and men within pay grades (often due to things like 'market pay supplements' for certain roles dominated by men), coupled with illegal payment of lower pay to part time workers;
b) Appraisal, development and promotion systems not being gender neutral in their effect;
c) Unavailability of flexible working in higher graded posts coupled with unavailability of quality, affordable childcare conveniently located;
d) Job segregation of women and men, sometimes exacerbated by culture and expectation within organisations;
e) Undervaluing of roles traditionally carried out by women.
Whether or not it is called an audit, unless an analysis of the pay gap provides the sort of data which will help distinguish between the causes it is almost useless. However, a company which believes it has none of the above issues, as a first step would find calculating the average pay of their employees segregated by gender illuminating, preferably looking at both the mean and the median. If this shows that there is a gap, which it almost certainly will, then a responsible employer would start to look at things like pay gaps within single grades, distributions of men and women within and between grades, take up of training and development opportunities, flexible working policies and practice, applicants for promotion, recruitment practice etc. A responsible employer would also start to talk to staff and unions about what practical measures are then needed to reduce the gaps found.
Of course, there is a separate question of how much of this should be published and/or how much should be shared with staff/unions. A pay analysis kept secret is unlikely to lead to any corrective action. The real fear of many employers is that the analysis may expose some historic illegal (if inadvertent) pay discrimination and an understanding with staff and unions that opportunities to correct these by negotiation will be explored before resorting to legal action might be helpful.
In any case, the prospect of regulations requiring some employers to do some analysis and publish some results must be welcomed as a first step by those of us who have long been campaigning for the implementation of Section 78 of Equality Act 2010. To be really effective, the regulations and any statutory guidance need to cover the points above.