By midnight tonight, every employer with more than 250 staff will have published information on how much men and women in their organisations get paid.
Or at least, that’s what the law requires.
The firms that have published data so far reveal that 78 per cent pay men more than women, while 13 per cent pay women more, the BBC has reported. (There were 8 per cent of firms who reported no gender pay gap.)
But what happens to companies that refuse to publish their pay gap information? And what will the government do about the companies that fess up to significant problems?
What the data will tell us
Employers across the public, private and voluntary sectors have to publish information on: the difference between men and women’s pay in their organisation, the difference between how much men and women get in bonus pay, and what proportion of male and female employees get bonuses.
The data will show the difference between median and mean earnings and bonuses.
This will give us a good idea of which sectors have the highest and lowest gender pay gaps, and will help single out individual companies that are doing particularly badly.
What the data won’t tell us
The gender pay gap is not about men and women different pay for the same job. That’s already illegal under the Equal Pay Act 1970 and the Equalities Act 2010.
Exactly why the average British woman earns 9 per cent less than the average man is an important question — but unfortunately, this week’s gender pay gap reports won’t help us identify a clear answer.
Some cases are easily explicable. For example, Ryanair pays its (median) average female employee 72 per cent less per hour than its average male worker — because, the airline says, nearly all of its pilots are male.
But in most cases, it’s a combination of factors, including the fact that women are more likely to work part-time, the effect of maternity leave and childcare, and the culture or structure of the organisation. Some of this will be down to women’s own choices; some will be created or exacerbated by employers.
This week’s data tells us about the symptoms, rather than the causes, of the gender pay gap.
It’s possible for companies to submit their data late and avoid a fine.
But the limits of this week’s data don’t end there.
If a company fails to publish its gender pay gap information by midnight, it could — in theory — face an unlimited fine from the regulator, the Equalities and Human Rights Commission (EHRC).
The fines could also be levied on firms that have tried to massage their stats, either by publishing them in a deliberately misleading format or by publishing “statistically improbable” data (i.e. firms that report a gender pay gap of precisely zero).
Pretty scary stuff.
But the process for enforcing the rules on gender pay gap reporting is slow — and could allow companies to miss today’s deadline by months with little or no comeback.
If a company fails to meet tonight’s deadline, the regulator will kick off a 98-day process of letter writing and investigations. At the end of that, the regulator will publish a report into what happened.
That’s potentially embarrassing for the company, but we’re still nowhere near the unlimited fines stage.
After the regulator’s report has been published, the company might want to sign a “section 23 agreement”, pledging to publish its overdue data and to file next year’s stats on time.
But even then, that means the regulator won’t know if the company has fulfilled its promises until after next year’s deadline.
And even if the company did renege on the deal, the regulator would need a court order and proof of continued non-compliance before it could consider issuing a fine.
It’s possible, then, that a company could delay publishing its gender pay gap data by months and still avoid a fine from the regulator.
There are loopholes for companies that could be among the worst offenders
As the Financial Times discovered in February, there is a loophole for partners in the top international law firms, accountants and consultancies that allows their companies to exempt their salaries from the firm’s overall gender pay gap data. That’s because they are technically considered owners rather than employees.
The problem is, it’s the senior staff at such companies that are most likely to see gender pay disparity. Exempting them from the firm-wide data could mask even greater problems.
The government won’t say whether it has plans to tackle companies’ gender pay gaps
And what about companies that do fess up to significant pay gaps?
Writing in the Telegraph today, Theresa May said she is “committed” to “tackling the burning injustices which marr our society. One such is the gender pay gap.”
But when FactCheck contacted them today, the government wouldn’t comment on whether they have plans in place to tackle employers who pay men more than women.
Today’s reporting deadline invites employers to set out plans to close their gender pay gaps, but these are voluntary and don’t appear to be something the government will be enforcing.
This is in contrast to Iceland, where employers are fined £355 a day if they do not submit their data or provide sufficient plans for closing their gender pay gaps.