The UK government introduced mandatory Gender Pay Gap reporting in April 2017 for organisations with more than 250 employees. Organisations are required to report on the median pay gap, mean pay gap, proportion of men and women in each pay quartile, median bonus pay gap, mean bonus pay gap, and percentage of men and women receiving bonuses.
Public organisations have a snapshot date of 31 March and are required to report their pay gap by 30 March the following year. Private, voluntary and other organisations have a snapshot date of 5 April and are required to report their pay gap by 4 April the following year. The average gender pay gaps for full time employees was 7.9% in 2021 (2020: 7%). The 2021 pay gap for all employees was 15.4 (2020: 14.9). The 2020 and 2021 surveys were slightly distorted due to the number of employees furloughed during the Covid-19 pandemic, who received 80% of normal pay under the Corona Virus Job Retention Scheme (2021: 3.7million employees and 2020:8.8 million employees). Organisations were required to exclude employees on furlough and those not furloughed but receiving reduced pay in their pay gap calculations.
The percentages of employees furloughed were higher in lower paying jobs, with the lowest 10% earners being the most likely to be furloughed. The percentage of men furloughed in 2021 was 5.3% (2020: 13%) compared to 6.3% of women who were furloughed in 2021 (2020: 10.2%).
Seventeen of the charities that we reviewed disclosed their gender pay gap, with an average pay gap of 9.6 – well below the mean pay gaps across various sectors in the UK as outlined in the AHSE survey. The highest pay gap was 17.6 and the lowest was -0.4.
The gender gap is influenced by three main factors: women’s participation in employment; a high concentration of women in part-time employment; and, over representation of women in lower productivity sectors.
Closing the gender pay gap within an organisation will therefore require concerted effort – including the integration of adequate systems, to ensure pay parity when recruiting new employees as well as when appraising and promoting existing employees. Progressive maternity and shared parental leave policies will also help to ensure that women are not penalised when taking time out to care for children after giving birth.
Ethnicity Pay Gap Reporting
Pay gaps faced by women, people from minoritised ethnic backgrounds and people with disabilities are partly caused by difficulty getting into and progressing into high paying positions in employment. Although gender pay gap reporting was mandated in April 2017, ethnicity pay gap reporting is voluntary. The number of employers publishing their ethnicity pay gaps has increased from 11% in 2018 to 19% in 2021.
Of the thirty six charities that we reviewed, 19% (seven charities), were actively working on reporting their ethnicity pay gap, although no full disclosures were made in the Trustees’ Annual Report.
Although ethnicity pay gap reporting is voluntary, some employers have taken the initiative to disclose their pay gap, demonstrating their commitment to transparently working towards equity in their organisations. In 2018, the department for Business, Energy and Industrial Strategy launched a consultation, proposing for ethnicity pay gap reporting to be mandated. The Women and Equalities committee subsequently published a report on 2 February 2022 recommending that the Government should:
· Introduce mandatory ethnicity pay gap reporting by April 2023 for all organisations that prepare gender pay gap reports, including a supporting narrative and action plan
· Provide guidance on how employers can capture, retain and report ethnicity data whilst complying with GDPR legislation
· Provide guidance on the methods for capturing, analysing and reporting ethnicity data
· Elect a body that will be responsible for enforcement
Men out earn women across all the ethnic groups, with the exception of Arab, Bangladeshi and Black Carribean individuals, where the pay gap is –0.39, 0.19, and –9.06 respectively. The pay gap is most pronounced amongst Indian, Chinese and Mixed White and Black Carribean’s, with a pay gap of 4.1%, 3.89% and 3.05% respectively.
The hourly median pay gap has narrowed since 2012 from 5.1% to 2.3% in 2019. However, amongst Black Carribeans the pay gap has increased by 3.3% over the same period. The ethnicity pay gap has also increased amongst Other Black African/Carribeans, Other Ethnic groups, Mixed/Multiple ethnic groups, and Mixed White and Black African’s (an increase of 17.7%, 2.7%, 13.2% and 29.9% respectively.
Ethnicity pay gaps continue to be driven by the high numbers of people from Black, Asian and other minoritised ethnic backgrounds working in low pay sectors such as hospitality, social care and retail, as well as the over representation of women, people from minoritised ethnic backgrounds and people with disability in part time work.
Chief Executives Salaries
Gender pay gaps are widest amongst senior staff, aged over 40. The highest gap disclosed in the ASHE survey (2021) was amongst the 40 to 59 age category. The gap has been reducing over the years - between 1996 and 2021, the gap amongst individuals aged 40 to 49 reduced from 24% to 12.3% and from 21.6% to 12.3% amongst individuals aged 50 to 59.
Twenty three (73%) of the charities that we reviewed disclosed their CEO’s salary, the median salary reported was £140,956 with an average salary of £153,323.
Amongst under 40’s the pay gap is least pronounced, and the gap has nearly closed since data was first collated in 2019. In 2021, the pay gap for under 30’s was 1, and 3 for individuals aged 30 to 39.