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An EPIC workforce with no pay gap?

The Equal Pay Information and Claims Bill 2019-2021 (EPIC Bill) was launched by MP Stella Creasy on 20 October 2020.  It seeks to increase transparency in the field of equal pay and expands pay reporting obligations under the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017.

The EPIC bill is thought to be long overdue by various organisation and governmental bodies, who are concerned that the current pay gap reporting obligations are not broad enough to cover all of the discrepancies in pay between individuals.

What would this bill change?

  • (1) Staff would get the right to know what colleagues are paid

New data published by The Fawcett Society, shows that only 31% of working women believe they would be informed if their male colleagues earned more for the same work. It is this lack of transparency and culture of secrecy that the bill wishes to put an end to in order to prevent discrimination and inequalities.

  • (2) It would expend the gender pay gap reporting for all organisation with more than 100 employees instead of 250

This decision was made following the Office of National Statistics’ report showing that currently the gender pay gap amongst organisations with between 10 and 249 employees is higher than those with 250 or more employees.

  • (3) It would Introduce an ethnicity pay reporting for organisations with over 100 employees

Although ethnicity pay reporting has been on the Government’s “to do” list for some time, it has not yet found its way into law.  Many are hopeful that such a change could be a first step in the right direction and open the door to even broader pay gap reporting. For example, according to TUC analysis of official statistics, disabled workers earn 15% less than other staff and a disability pay gap reporting could potentially help raise awareness to this issue and proactively fix it.

What would it mean for my business if EPIC comes into force?

If you are an employer with 100 or more employees, it is expected that, from the enactment of the bill, you would only have around to 12 months to publish your company’s pay gaps (gender and ethnic). These results will need to be published on employers own website and a government site. Hence, they will become publicly available, including to customers, employees and candidates.

As a result, employers might wish to proactively review and calculate their pay gaps and look at what the commercial and cultural impacts will be of eliminating those gaps. Depending on the results, your business might even need to consider taking new or faster actions to reduce or eliminate any gaps (which could impact on your recruitment, people management and commercial strategies) given the strength of cross-party backing to the EPIC bill and the probability that it will become law.

If and when it does, EPIC will certainly have an impact given a survey from the CIPD and recruitment outsourcing provider Omni, which found that less than a quarter of UK employers go beyond basic legislative requirements on diversity when it comes to recruitment and selection of senior level roles, which clearly shows that without such new legislation, change is unlikely to come on its own.

However we must all keep in mind that, while reporting can help, transparency alone will not close pay gaps. Government and employers need to address the structural difficulties which prevent all employees to be treated and paid the same.

LexLeyton can help businesses to create strategies for developing and maintaining the right policies to benefit culture and sustainable growth. Contact us for a free consultation on of the issues raised in this blog or anything HR and employment law related at https://lexleyton.co.uk/free-consultation/ to discuss how we can help.

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