‘Equal pay’ and ‘gender pay gap’ are not the same thing

Introduced in April 2017, companies with over 250 employees will be expected to complete a government template form to report their gender pay gap by March 2018.

As part of the BBC charter requirement, the BBC has already released data on staff earning more than £150,000: to much hullaballoo. Equally, the civil service has also recently released data that reveals that the average male civil servant in 2017 is paid £28,280 and the average female employee £24,680 – a gap of 13%, which is only down slightly from 15% in 2015. This 2% drop indicates that equality of pay will take some 37 years to come about.¹

There are going to be a flurry of reports similar to the above in the months to come. Yet what we must be careful about (and yes, we’re enforcing the use of the word ‘must’), is that we absorb reports such as this, not in a sensationalist way, but in a measured and considered way.

And to understand why, it doesn’t do us any harm to go back to basics and to establish what the gender pay gap is showing us. And what it isn’t. Because there’s much confusion out there between the gender pay gap and equal pay.

The Advisory, Conciliation and Arbitration Service (who provide free and impartial information and advice to employers and employees on all aspects of workplace relations and employment law), has summarised the difference between the two quite neatly. ‘The gender pay gap differs from equal pay as it is concerned with the differences in the average pay between men and women over a period of time no matter what their role is. Equal pay deals with the pay differences between men and women who carry out the same or similar job.’

It means that whilst the gender pay gap information is useful to a degree, it only shows an overall disparity. But there might be genuine reasons for this. Take the example by Dean Royles, Director of HR at Leeds Teaching Hospitals NHS Trust. He says ‘… if a company employs 11 people, say 10 engineers and one managing director, the 10 engineers (nine women and one man) all earn exactly £50,000 per year so they are all on equal pay. The managing director, who happens to be a man, is on £100,000 per year. The average salary for women in the organisation is £50,000 per annum while the average pay for men in the organisation is £75,000 per annum (£50,000 + £100,000 ÷ 2), a gender pay gap of £25,000 or 50%. In this case if the managing director was a woman the gender pay gap would be £5,000 in favour of women.’

Now whilst this is a simplistic example (and we’re talking about companies with over 250 employees), it drives the point home. Yes, the gender pay gap reporting is a step in the right direction to addressing an important organisational issue. But we also need to seek out what the reality is behind the disparity. As that’s the only way true inequalities will be able to be addressed.

¹The Guardian, 10th August 2017


Wednesday, 16 August 2017

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‘Equal pay’ and ‘gender pay gap’ are not the same thing