Published: 24 July 2017
Area of Law: Gender Pay Gap Insights
BBC Pay Report - Employment Law implications
The BBC has for the first time published the salaries of its highest paid stars who earn over £150,000. The annual salary report (“the Report”) has exposed a gender pay gap of its top earners, as well as a significant under representation of ethnic minorities.
Chris Evans topped the list with a salary of up to £2,249,999, with Gary Lineker closing in second with a salary of £1,750,000-£1,799,999. Claudia Winkleman, the highest paid woman on the list, came 8th with an annual salary of up to £499,999. Only 10 people in the entire list were ethnic minorities, none of whom were within the top 10 at all.
The results have attracted an outcry of criticism from celebrities and MPs demanding to know why women and ethnic minorities doing the same job are being paid significantly less than their white male counterparts.
The embarrassment faced by the BBC illustrates the importance of paying staff equally in order to avoid adverse publicity and serious legal implications.
Gender Pay Gap Reporting
By 4 April 2018, companies who employee 250 employees or more and voluntary sector organisations will be required to publish a Gender Pay Report under the Equal Pay Act 2010 (Gender Pay Employment Information) Regulations 2017 (“the Regulations”). Public sector bodies must publish their reports by 30 March 2018. Updated Gender Pay Report will need to be published every year thereafter.
The aim of this is to ensure that payment of employees is more transparent, in a bid to drive down unfair pay.
Among other things, a Gender Pay Report will need to express the overall pay gap for
men and women presented both as mean and medium figures. Employers are also encouraged to include an action plan setting out the steps they will take to reduce pay disparity.
This imposes a significant administrative burden on companies, which is not alleviated by the fact that where there are many groups within a company, each subsidiary will be required to produce its own separate Report.
The Regulations have also been criticised for being overly complicated; the definition of “employee” for example is not defined and many businesses have reported difficulty to us in trying to ascertain what exactly is included within the definition of “pay.”
Failure to comply with the Regulations will be unlawful and, given the complexity involved, it is important that employers allow plenty of time to start collating the required information and address any “adverse publicity” issues in good
time before this deadline.
Discrimination and Equal Pay legislation
It is not just larger companies who should take note. All employers, irrespective of how many staff they employ, must ensure they pay men and women equal pay for equal work. Failure to do so will potentially be in breach of Equal Pay legislation which could entitle employees to claim the difference in pay backdated over several years. The cost is not insurmountable; in 2016 a Network Rail employee was awarded £75,000 backdated pay.
Treating particular groups of staff differently than others be this women
, ethnic minorities or any other group could also attract claims for direct and indirect discrimination.
An employee who believes that they are being discriminated against in this way is legally entitled to submit questions about their pay to the employer, to determine whether they have a claim. As well as the obvious financial cost such claims attract unwanted publicity and are damaging to the “brand image” of a business.
Publication of the Report will undoubtedly have created a legal headache for the BBC, which is now at risk of various claims and will have to determine what action it can take to minimise the risk of those claims materialising, subsequent to its publication.
There has been significant
focus over recent years on equal pay between men and women; however the BBC Pay Report highlights that employers should assess equal pay across its entire workforce, and where there is pay disparity, determine what action it can take now to minimise or equalise the effect. This is certainly preferable to discovering pay disparities as a result of being asked to disclose such information by the employee in the pursuit of a claim, or after the publication of a Gender Pay Report.
You can access our Gender Pay Gap technical briefing here.