Gender pay reporting

In 2017 the government introduced gender pay gap reporting for the vast majority of businesses with the aim of addressing a systemic cultural issue. This briefing paper will inform on the requirements and explore some of the issues behind the gap and the role of internal audit.


Background

In 1970 the Equal Pay Act prohibited less favourable treatment between men and women in terms of pay and conditions of employment. The Equality Act 2010 replaced previous legislation and also included making it unlawful to prevent employees from having discussions to establish if there are differences in pay.

Even though it has been unlawful for over 40 years to pay one person more than another based on their gender when doing the same role, it happens, the Office for National Statistics found that male financial managers and directors earn 32.4% more than women in the same occupation. The testimony from staff at the BBC following the release of figures in 2017 further demonstrates the fact that this is a very real issue.

The amendment to the Equality Act seeks to address this - The Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 and The Equality Act 2010 (Specific Duties and Public Authorities) Regulations 2017, apply to private/charity and public sector respectively.

The gender pay gap differs from equal pay as it is concerned with the differences in the average pay between men and women over a period of time no matter what their role is. Equal pay deals with the pay differences between men and women who carry out the same or similar jobs.

The government defines it as the difference between the average earnings of men and women, expressed relative to men’s earnings. For example, ‘women earn x% less than men per hour’.

The World Economic Forum has been…