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Wary businesses fear discrimination claims but don’t acknowledge gender pay gap

Four in ten employers are worried that transparency will lead to equal pay claims

1 October 2015

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Less than one in six employers are concerned that differences in pay are due to gender, but are fearful that the perception of discrimination will lead to more litigation.

A survey conducted by Bond Dickinson did, however, reveal many more businesses are concerned about the implications of new gender pay gap regulations, which will affect approximately 8,000 employers who between them employ around 40 per cent of the working population.

The proposed regulations require large private and voluntary sector employers to publish data on their gender pay gaps, a move the government hopes will help eliminate differences in salary between the sexes.

The Office of National Statistics has found that, on average, men are remunerated 19 per cent more than women.

The government is currently considering three options: a requirement to publish an overall gender pay gap figure; details broken down by full and part-time employees; and details broken down by grade or job type.

Respondents to the survey were concerned that publishing a gender pay gap figure based on an average across their organisation would be too simplistic. Many felt that for data to be meaningful, more complex reporting is required.

However, identifying comparable jobs within an organisation is fraught with difficulty, as Bond Dickinson frequently encounters when dealing with mass equal pay claims.

Lisa Robertson, a managing associate at the firm, said: 'With two-thirds of respondents paying according to a grading system that depends on job evaluation, the question of whether gender pay gap figures should be broken down by grade or job is highly relevant. But if employees on the same grade aren't doing comparable jobs then calculating the gender pay gap by grade may not just be meaningless, but potentially also misleading.'

Bond Dickinson's survey also found that four in five employers are not concerned that any differences in pay between male and female employees could be for gender-related reasons, with just 16 per cent concerned their pay arrangements may be influenced by the gender of their staff.

Almost two thirds, however, thought the new rules would encourage their organisation to take action to close their pay gap. Some 70 per cent believing that staff would question the reason for their rate of pay, while 42 per cent feared formal Employment Tribunal claims would be pursued.

Almost half of respondents would welcome help in understanding the new regulations, while significant numbers also noted they needed help in calculating their gender pay gap, analysing the significance of the result, and addressing the issues identified.

'It remains to be seen what employers will be required to publish,' observed Robertson. 'What is clear is that each organisation's gender pay gap will be subject to scrutiny and employers will have to take steps either to address it or explain it.

'Employers will be put to a lot of work in analysing and publishing gender pay gap information which is meaningful in the context of their particular organisation, and then deal with the potential fall-out. Whatever the specific requirements, it is worth being proactive; the ostrich approach won't be a viable option.'

Bond Dickinson legal director Lorraine Heard added: 'Organisations whose gender pay gap is bigger than the national or industry average will need to have an understanding of the reasons for this and be able to provide an explanation. While failing to publish gender pay gap details involves the incurrence of a relatively insignificant fine of £5,000, the attention this draws to the organisation's position on gender pay could prove to be more damaging than publication would have been.'

John van der Luit-Drummond is deputy editor for Solicitors Journal | @JvdLD

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