Women at work – pay, pension and #embraceequity

On International Women’s Day this year we reflect on some recent updates in relation to women’s employment, women’s issues and workplace matters.  We consider whether employers are “embracing equity” for women across the UK and if not, what steps they should consider taking to ensure that they are championing, supporting and ensuring equity and equality for their female employees.

The Gender Pay Gap and Beyond

Since International Women’s Day 2022, statistics have surfaced which show the effect of the Gender Pay Gap on women in the workforce and that, unfortunately, not only is the gender pay gap not closing as quickly as many had hoped, but also the impact of the gender pay gap is impacting more than just the basic annual salaries of women in work.

The Trade Union Congress (TUC) has published analysis that women effectively work an average of 56 days each year for free due to the Gender Pay Gap, which is at 15.4%. This gap has fallen by an average of 0.4% a year since 2011. In relation to jobs dominated by female workers like education and social care, women are paid much less per hour on average than men, and it was reported by TUC that this is due to them being more likely to be in part-time or lower-paid roles. There are also regional variations in the gender pay gap which are likely to be caused by variance in the types of work which are most common in particular parts of the UK.

Further, data from 4 million of Legal & General’s (L&G) pension scheme members was analysed and showed that the gap between men and women’s pension pots at retirement is 56%, and that stark pension gaps even exist in female-dominated industries. L&G has commented that the industry should engage with the Money and Pensions Service on how to better communicate the important benefits of pension saving for women.

HC tip for employers: Employers should ensure that information around their pensions schemes is easily accessible and communicated to all members of staff. They should also be considering whether they need to be undertaking equal pay audits to ensure that their female employees are being paid equally to their male counterparts. This should take into account the total compensation being awarded to all employees and should not be limited to annual salaries alone.  This will minimise the risk for a sex discrimination claim or an equal pay claim arising as a result of any discrepancies in pay between male and female employees.

On 27 February the UK Government Equalities Office published new gender pay gap reporting guidance here, which has updated the previous guidance in place. Employers with 250 or more employees still need to report on their gender pay gap data and the obligations and controls remain the same. However the guidance has been updated so that it is clearer and simpler for employers to follow.

HC tip for employers: While all employers need to ensure they are complying with their obligations to report, they will also need to consider the publication of that data and how that data is compiled.  Gender pay gap data is significantly different to the data an employer would receive during an equal pay audit, as it does not only take into account the difference in compensation for comparative or similar roles.  If you therefore have an organisation which is heavily male at the most senior end of the scale and more heavily female at the junior end of the scale, your gender pay gap is likely to be higher than the average. Employers will therefore need to think carefully about how that information is displayed and conveyed to their employees when it is published or else they may risk not only internal dissatisfaction from their female employees but also external damage to their reputation.

Women on Boards of FTSE Companies

On 28 February 2023, the FTSE Women Leaders Review published a report on gender balance in FTSE leadership. 50 of the largest private companies in the UK were included in the review. In terms of representation of women on those boards, there was on average 31.8% representation of women, and there were 19 boards that were either all-male or had only one woman. You can read the report here. The statistics show that there is still room for higher representation of women in FTSE leadership.

Transparency and accountability of FTSE firms in this area is obviously necessary to understand how FTSE firms operate in terms of representation at board level. An increased presence of women at Board (or any more senior) level will also assist in the reduction of an employer’s gender pay gap.

HC tip for employers: There is a trend with key business stakeholders wanting to see a ‘trickle down’ effect of transparency and action in relation to female representation in leadership in the FTSE firms to smaller organisations.  The expectation being that this would instil change in the economy more generally. Employers should therefore be mindful that investors and buyers may wish to see real figures and/or evidence of action being taken to address female representation and the gender pay gap in the due diligence process during corporate transactions.

Women’s health in the workplace

There are ongoing discussions in relation to enhancing women’s rights, for example there is much debate around the previously proposed menopause leave trial which was rejected by ministers earlier this year and also Labour’s proposed “menopause action plan”. Incidentally, Spanish parliament recently approved a bill allowing “menstrual leave” from work. It is likely these conversations will continue and grow in strength.

However, it remains to be seen how any UK legal framework could regulate how employers handle women’s health issues such as menopause and menstruation in the workplace, such as whether any legislation is needed beyond the scope of the existing Equality Act.

HC tip for employers: As society becomes more open about speaking about health issues, it is increasingly important for employers to be wary of discrimination in the workplace, particularly if such health issues relate to the fact that an employee identifies as a woman or could amount to a disability under the Equality Act. Should you require any advice on this issues to do with women’s health in the workplace, or wish to refresh policies, please let us know.