The UK government has promised to give their views and proposals for introducing Ethnicity Pay Gap (EPG) reporting by the end of 2020. A year ago, I pointed out statistical, data & ethical issues with EPG and listed 5 possible ways EPG could be introduced but I have not yet focused on what employers should be reporting. I have now concluded that Ethnicity Pay Fingerprints are vastly superior to Ethnicity Pay Gaps and my new recommendation is that all employers with 500 or more employees should be required to report their Ethnicity Pay Fingerprint (EPF) instead of their Ethnicity Pay Gap. If EPF is widely adopted and found to be beneficial then I would recommend that reporting of other protected characteristics such as gender & disability should be reported using Pay Fingerprints instead of Pay Gaps.
You’ve just calculated your latest gender pay gap. With a sigh, you note that it is still large and at current rate of progress, it will take you 30 years to close it. Surely there must be a quicker and easier way to eliminate your pay gap? The good news is that if you use the 10 tools of Creative Pay Gapping, you can eliminate your pay gap tomorrow!
“… our 2019 gender pay report which highlights that on average, women earn more than men across all of our UK sites and divisions…“
When I looked at the two legal entities that were required to report gender pay gaps, I saw that both reported pay gaps favouring men instead. Something odd is going here and it’s a perfect case study to show why anyone who analyses pay gaps needs to pay more attention to a Bletchley Park codebreaker from world war 2 who introduced the world to Simpson’s Paradox.
I have a spotted an incorrect median gender pay gap published by a well known name in a certain industry. They shall remain nameless for now since I am trying to get them to accept their error and publish a new gender pay gap report on their website. I know they have made an error because their published data violates the laws of mathematics as I will explain in this blog. All it takes to spot such an error is a simple calculation you can do in your head and an understanding what the median measures.
Imagine where you work, the median women earns 33% less than the median man. Although your workplace is gender balanced with 50:50 men:women, the pay gap exists because 1 in 4 of managers and 3 in 4 of the lowest paid admin staff are women. How long will it take for the pay gap to disappear assuming that all future recruitment at all levels have 50:50 candidate pools with men and women equally likely to be appointed to the role?
Up to 25 years i.e. a generation
On 24th March 2020, the UK government suspended enforcement of the gender pay gap reporting deadline of 5th April. As of today, just over 50% of employers have reported their 2019 gender pay gap figures. Despite this shortfall, I have used statistical imputation methods to calculate that the median gender pay gap narrowed in 2019 from 9.6 pence in the pound to 9.0-9.2 pence in the pound.
In April, I was asked to analyse the trends in UK gender pay gaps over the 3 years of mandatory reporting from 2017 to 2019 for Practical Law. They were interested in 7 customised sectors and the links to these can be found in this post.
This post was updated on 3rd June 2020 with the latest data
Update 5/4/20 – On 24th March, the government suspended enforcement of the deadline for reporting 2019 gender pay gaps due to the coronavirus outbreak. As of now, Only 40% of employers have reported their 2019 data. Employers are still required to report 2019 data but will not be punished for being late in doing so.
The government requires all organisations employing 250 or more employees to submit gender pay gap data. All data is available to the public and can be found on the government’s gender pay gap website. I have downloaded this data and created a spreadsheet tool to present the data in a more user-friendly and visual format.
Recently, a lot of people have been making incorrect claims about what a gender pay gap tells you. I have been pointing out these errors but in doing so, I am conscious I come across as a pedant or a negative voice. The problem is that the official gender pay gap measure (the difference between the median man and the median woman) is just a single number and that single number does not capture the full nuance of what is going on. I have decided it is time to introduce the Gender Pay Fingerprint to the world as an alternative and going forward, I will be encouraging people to use this instead.
The BBC presenter Samira Ahmed has won her claim for equal pay at the employment tribunal. She successfully claimed that Jeremy Vine was an appropriate comparator for her pay. She is not the only female presenter to make a claim with over 50 more claims under consideration at present. Assuming that these are all successful, will these have any effect on the BBC’s gender pay gap for 2019 of 7p in the pound?