With the 4th April deadline looming for the Government’s new mandatory Gender Pay Gap reporting, some in the grocery sector may be tempted to think they have little to fear from a law which currently carries practically no enforcement measures. However, the risk of reputational damage means retailers have to take the exercise seriously
by Amanda Jones
Amanda Jones is a partner in the employment team at Dentons.
What is Gender Pay Gap reporting?
Under the new measures employers must produce an annual report stating the difference between male and female hourly earnings, bonuses, and the proportions of men and women in each of the organisation’s pay quartiles – the latter will demonstrate whether men (or women) are more likely to be employed in the higher earning roles.
Does it apply to all businesses?
Companies employing more than 250 people are required to report before the deadline of April 2018. Smaller organisations are, so far, exempt.
What are the consequences of not reporting, or reporting badly?
While enforcement action could theoretically be taken by the Equality and Human Rights Commission against any company failing to meet the new requirements, at present this seems unlikely.
However, the gender pay gap issue has caught the attention of the media and become a major reputational battleground. The BBC‘s disclosure of the salaries of its high earners was not part of the new legal requirements, but the timing and the content of the reports helped bring the issue into sharp focus. The BBC has a cast iron revenue stream, but for retailers, such negative publicity could be disastrous.
Recent research found that employers with significant pay gaps are holding back reporting until nearer the deadline of April 2018, in order to avoid standing out from the crowd. This is not surprising, particularly given that some gaps are rumoured to surpass 40%.
It is not clear that this tactic will work as the local media will be on the lookout for reports from any employer prominent in a given community or region. Women, especially current and potential employees, will also be keen to scrutinise Gender Pay Gap reports, as they will naturally wish to join organisations that don’t discriminate against them. Therefore, a weak report may have a serious knock-on effect on recruitment and in particular, the ability to attract the best talent.
What should retail employers who are required to report do?
Employers are required to upload their Gender Pay Gap information to a government website, which is available for anyone to view, and must also ensure that the data is readily available on their own websites. Many employers have taken the opportunity to set out the information alongside an explanation to the background, and any measures being taken to address it. For instance, many employers – including Dentons – have joined the 30% Club, which aims to ensure that boards in FTSE 100 companies are at least 30% female in their make-up, and more generally to ‘better the gender balance from school room to boardroom’.
While it is not necessary to provide an explanatory note, many have taken the view that the bare figures may give a misleading view as to their approach to diversity and equal pay. Some employers are, however, more vague than others, and some statements constitute little other than comforting words for anyone who is interested in how seriously they are taking this issue.
Scottish food and drink businesses must, therefore, think carefully about the importance of their reputations, both to female shoppers and as an employer of choice for the next generation.
Even those not yet required to report should consider whether they are treating all their employees fairly and equally.
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