FT reveals gaps in Gender Pay Gap Reporting
Guest Blog by Lorraine Heard, Legal Director at transatlantic law Womble Bond Dickinson.
The Financial Times investigation into the accuracy of the gender pay gap information published to date highlights a growing concern that some companies are not reporting accurate figures (Financial Times 8 December 2017).
Whilst it is not impossible for a Company to have a zero gender pay gap it is highly improbable that the gap would be zero when measured on both a mean and a median basis. The FT recently questioned companies whose reported figures looked odd and discovered that some employers appear not to be taking their obligation to publish their gender pay gaps and gender bonus gaps seriously. This is illustrated by the fact that when one company’s zero figures were challenged it changed its results and published a mean gender pay gap of 32.6% and a median gender pay gap of 76.5%.
Womble Bond Dickinson’s equal pay expert Lorraine Heard believes that the problem is more serious than the FT investigation reveals.
Some companies are publishing gender bonus gaps of more than 100%. This is simply not possible if the calculations are completed correctly (although conversely it is possible to have a gender bonus gap of more than -100% if women receive considerably higher bonuses than men on average as the figures are calculated as a percentage of the man’s rate of pay). The fact that some organisations are reporting a positive gender bonus gap in excess of 100% reveals that not all employers are doing their sums right.
Other problem areas include:
• The incorrect handling of salary sacrifice schemes.
• The potential for different approaches to be adopted in respect of employees who do not have regular weekly working hours.
• The inaccurate handling of incentive and other payments that the employer does not class as bonus payments but which fall within the statutory definition of ‘bonuses’.
• Confusion regarding the correct handling of bonus payments that should be included as part of the gender pay gap figures, in addition to the gender bonus gap figures.
The above matters will not be apparent from the published results.
As at 8 December 2017 only 322 organisations have published their gender pay gap figures. There are estimated to be 9,000 private employers who are obliged to publish their results in addition to the numerous public sector employers who have more than 250 employees. The fact that there are obvious problems after only 322 organisations have reported their results is a real cause for concern.
There is no point in having transparency in gender pay unless all organisations are confident that they are entering a level playing field when they publish their results.