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Are you ready for equal pay reporting?

Employers are advised to start thinking about how the new rules around reporting gender pay gaps will affect their organisation.
 
The mandatory reporting requirements mean that organisations with 250 employees or more will have to publish the difference between the average amounts that men and women are paid.
 
Although such gaps occur at many companies and other organisations, there are different reasons for them. There is no obligation for pay rates to be the same between men and women – only that organisations are able to explain any difference that exists. Across the whole economy, the current pay gap is around 19 per cent, meaning that women earn approximately £0.80 for every £1.00 that men do.
 
The government has just finished a consultation about how employers will have to report pay differentials – including what contextual information can be presented alongside the figures themselves.
 
The new regulations have legal implications, as well as reputational ones for employers – since unexplained pay gaps could lead to customers and prospective employees choosing other organisations. “Whatever form of report employers have to publicise, there will be issues in terms of potential recruitment, retention and reputation,” commented one employment law expert. “If the pay gap is large, and larger than competitors, then this will obviously impact on recruitment and retention and will say something about an organisation’s commitment to gender equality.”
 
At present, women tend to end up in lower-paid jobs – not least because they are more likely to take time off work to raise children. The recent introduction of the living wage of £7.20 per hour, rising to £9 in the coming years, will go some way to addressing pay imbalances. Affordable childcare and better flexible working arrangements will also help.
 
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