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Equality Human Rights Commission offers immunity in return for voluntary Gender Pay Audits

 

The Equality and Human Rights Commission (EHRC) have invited employers that have 250 or more employees to publish their gender pay gaps. In return they are offering limited immunity from investigation. This immunity will not extend to anti-discrimination cases, but will mean that participating companies are unlikely to receive formal requests for further information during the next two years.
 
The measures follow the EHRC consulting with business, trade and campaigning organisations in a bid to find a way to encourage companies to share information on a voluntary basis. According to the Commission’s research half of all employers view reducing gender pay gaps as a high priority. However, only 9% report this information outside of their Human Resources departments. Furthermore 1 in 5 companies actively encourage non-disclosure of employees pay.
 
The EHRC has set a structure of quantitative measures for reporting information on pay by gender. Companies and organisations employing more than 250 staff participating can choose from one of the measures below:-
  • 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.
The opportunity to provide a narrative with one or a number of the above factors as a supporting statement to explain a pay gap is also requested with the voluntary disclosure proposals.
Organisations with 250 to 500 employees participating are encouraged to opt initially to publish information measured by at least one quantitative indicator. Organisation with more than 500 employees would be encouraged to report on two indicators, including a narrative. Within the next two years, these large organisations would be encouraged to move to using at least three indicators, including a narrative. The EHRC will be producing guidance on these proposals in April 2010.
 
HR professionals have warned that a two year amnesty will do little to encourage employers to conduct voluntary audits. An article published by Human Resources magazine Personnel Today has revealed companies would be worried what the findings would do to their reputation, and the knock on effect this would have on their ability to hire, a sort of paradox.
Speaking to Personnel Today Brad Skinner, head of HR at Barclays bank, added employers would likely weigh up the risk of being investigated by the EHRC against the damage publishing the data could do to companies.
 
It appears the ERHC have overlooked at how their proposals would work in practise. Campaigners will again argue that the only way out of this “catch 22” would be to introduce mandatory pay audits.
 
There is a provision to introduce mandatory pay audits for organisations employing over 500 staff as of 2013 in the forthcoming Single Equality Bill. So there is every incentive for employers worried about bad publicity, while they can hide, to address their pay gaps before the curtains raised.  

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Posted by Dizali Mentha


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