Employers that voluntarily report their gender pay gaps will receive up to two years immunity from investigation, the equality watchdog has announced today.
This immunity will not extend to anti-discrimination cases, but will mean that companies who make public their pay gaps are “unlikely” to receive formal requests for further information during the next 24 months, the Equalities and Human Rights Commission has said.
The Equality Bill currently before Parliament contains a reserve power which could lead to mandatory reporting of pay gaps in organisations by 2013.
But the unprecedented step announced by the EHRC today would allow a period of amnesty to encourage employers to adopt voluntary measures to analyse and make public the differences between the earnings of their male and female employees.
The measure is part of new proposals from the commission, released today, outlining how private and charitable sector employers with more than 250 employees should report pay differentials between men and women.
Following a consultation with the CBI, TUC and other business and voluntary sector professionals, the commission is proposing that firms report on at least two of the following indicators:
• the single-figure difference between the median hourly earnings of men and women
• the difference between the average basic pay and total average earnings of men and women by grade and job type
• the difference between men’s and women’s average starting salaries.
It is also offering employers an option to include a narrative of the causes of their organisations’ gender pay gaps.
By 2012, companies with more than 500 workers would be encouraged to move to using at least three indicators, including a narrative.
The equal pay gap for full-time roles stands at 12.2% based on median figures, despite 40 years of equal pay legislation.
Trevor Phillips, chair of the Equality and Human Rights Commission, said: “Transparency is really the first step to addressing the gender pay gap. If an employer doesn’t look at their own gender pay gap, how do they address it? By understanding that they have a gender pay gap problem they can start to take steps to address it.”
He added: “Those that take up these measures will receive some immunity from our investigative powers. I hope this incentive, combined with the goodwill and commitment shown by our partners so far, means that we can deliver high levels of participation on a purely voluntary basis, ensuring that gender pay transparency will become normal business practice.”
Phillips pointed out that transparency would not mean that employers would have to publish details of individual employees’ salaries.
Equality campaigners backed the EHRC proposals, but called for clear guidance on auditing pay.
Claire Reynolds, policy advisor at Opportunity Now, said: “If these recommendations are to be successfully taken up by employers, it is vital that clear guidance and practical and pragmatic assistance is provided.
“Collecting and publishing pay data requires business commitment, time and resources, and we would urge the government to ensure that employers are adequately supported.”
The commission will be producing guidance on these proposals in April, and will begin monitoring the take-up of the metrics by large companies later this year.
Last year, Personnel Today learned that the Conservative Party was likely to scrap government plans for mandatory gender pay audits included in the Equality Bill.