How can employers address pay imbalance?

15 August, 2017

Important recommendations for employers towards reducing pay gaps were made by the Equal and Human Rights Commission (EHRC) in its strategy report published this week, “Fair opportunities for all”.  The gender pay gap currently stands at 18.1% and new evidence supporting the report shows an ethnicity pay gap of 5.7% and a disability pay gap of 13.6%.

Flexible working

Increased opportunities for flexible working are seen as important ways to improve participation in employment and to reduce pay imbalances.  The report recommends that employers offer all jobs, including the most senior roles, on a flexible and part-time basis unless a genuine business reason means this is not possible.  Flexible working should not be an obstacle to career development and promotion, and employers should be more willing to see flexible working as a reasonable adjustment for disabled people.  The report also proposes that the Government should legislate to extend the statutory right to request flexible working to apply from day one of employment.

Recruitment and promotion

Employers are recommended to take active steps to tackle prejudice and bias in recruitment, promotion and reward decisions.  They should use transparent competencies for job roles, and advertise senior roles widely rather than relying on personal networks.  All persons involved in making appointments should be trained in equality law and fair decision-making.  Employers should set targets for senior appointments to increase diversity in their talent pipelines, and facilitate more flexible career paths.

Sharing the caring

The report identifies the uneven distribution of parenting and caring responsibilities, the low take-up of paternity leave and parental leave, and access to affordable childcare as significant factors contributing to the gender pay gap.  The key recommendations here are for legislative change to tackle the “motherhood penalty”, such as the introduction of a “use it or lose it” parental leave for fathers, at a pay rate which properly incentivises them to take up this entitlement.

Employers are advised to introduce policies which encourage men to share childcare more equally and so reduce workplace bias towards mothers as the primary carer.  The adoption of enhanced shared parental pay (avoiding discrimination risks) can be a way for employers to support male employees to increase their caring responsibilities and to change their organisational culture.

Pay gap reporting

The report advises that the Government should extend mandatory pay gap reporting (see our previous blog – https://wordpress-84642-837496.cloudwaysapps.com/employment/mind-gender-pay-gap/ ) to ethnicity and disability pay gaps.  It recommends that employers report on their gender pay gaps even where not legally required, and voluntarily report on their ethnicity and disability pay gaps and their action plans to close these gaps.  Transparency in these areas is viewed as beneficial to the employer’s organisation and its employee relations.  It may also benefit organisations when bidding for the award of public sector contracts.

Please contact the Employment Law team at Cripps Pemberton Greenish for assistance with reviewing your contracts, policies and recruitment processes in the light of these recommendations, or for the provision of equality and diversity training to your organisation.  The ECHR report is at https://www.equalityhumanrights.com/sites/default/files/pay-gaps-strategy-fair-opportunities-for-all.pdf