Gender Pay Gap Reporting Becoming Increasingly Important for Companies

Gender Pay Gap Reporting Becoming Increasingly Important for Companies

Approximately 1,500 large companies in the United Kingdom (UK) failed to meet the April 5, 2018, deadline requiring employers with more than 250 employees to report specific figures on their gender pay gap.

Under the UK’s Equality Act 2010 (Gender Pay Gap Information) Regulations 2017, public, private and voluntary employers in scope must annually publish gender pay gap data in a written statement on their website and report on their figures to the gender pay gap reporting service. Companies must report on mean and median gender pay gaps related to hourly pay and bonuses, as well as the proportion of men and women receiving bonuses and in each pay quartile. While companies that did not meet the deadline have been given a 28-day grace period, failure to report in this extension period will result in legal action, unlimited fines and reputational damage.

The UK government identified reducing the gender pay gap as a key priority, and while a downward trend is occurring, there is still work to be done. There is currently a 9.7 percent median pay gap among the 10,000 companies that reported to the UK government’s gender pay gap service. This gender pay gap is a manifestation of sex-based discrimination — a violation of internationally recognized human rights — and is caused by a number of factors, including the disproportionate number of males in higher paying sectors, the effects of part-time or maternity leave, discrimination and traditionally gendered employment roles.

Companies should look to their UK-based suppliers to ensure they are complying with this new legislation. This is particularly important for companies stipulating requirements for their suppliers to comply with all national legislation, or whose codes of conduct and contractual agreements prohibit discrimination. Furthermore, companies need to shift their focus to their global supply chains, and assess gender pay gap data in their organization and operations as part of their corporate social responsibility program to ensure they can meet the requirements emerging around the world for this pervasive issue.

A growing number countries are taking action to close the gender wage gap, and companies need to assess their global supply chains for gender pay gap data in order to effectively perform due diligence. For example, Iceland passed an amendment to the Act on Equal Status and Equal Rights of Women and Men, becoming the first country to require employers to prove they are providing equal pay and report on this to the government for certification. In France, companies with more than 50 employees are required to install software that links to their payroll system to monitor unjustified pay gaps. In other countries such as Germany, Belgium and Austria, companies are required to make gender pay gaps publicly available or available to employees on request. Legislation requiring companies to access and report on gender pay gap and related data is becoming increasingly common, and companies need to be able to respond efficiently to keep their competitive advantage in a global market.

The Corporate Social Responsibility Suite automates supply chain data collection, validation and reporting on supply chain data to ensure companies’ CSR programs are prepared to adapt to changing regulatory requirements. Assent helps companies incorporate gender pay gap considerations into their supply chain assessments and corporate social responsibility programs by supporting learning and training initiatives through the Assent University Classroom, and providing practical guidance from our team of regulatory experts.

For support with your gender pay gap data gathering and reporting, or to learn more about Assent’s Corporate Social Responsibility Suite, contact us at info@assentcompliance.com.

 

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