As UK Organizations Publish Gender Pay Gaps, Questions Arise Over Enforcement

As UK Organizations Publish Gender Pay Gaps, Questions Arise Over Enforcement

As an early April deadline draws closer, reports continue to trickle in from organizations in the UK with over 250 employees that are now required to publish their gender pay gaps under rules that came into effect last year. The full list is available for download from the UK government and the press has been busy digging through it to see what the gap looks like at large, household-name brands, as well as to identify the worst offenders. Sky News reported last week that, as expected, most of the reports so far show male employees earning more, including those of some familiar companies:

Government figures show that men are paid nearly 65% more per hour at high street fashion store Phase Eight and nearly 52% more at EasyJet. Organisations with 250 or more workers must publish their figures by April, and so far 527 firms have done so. Nearly half of the organisations pay men at least one tenth more per hour and 426 of them pay men more, on average, per hour. …

Public sector bodies that show a wide divergence in pay per hour include the Royal Orthopaedic Hospital in Birmingham (men paid 34.8% more than women), and the Office for Nuclear Regulation (32.9%). Many of the firms in the top 20 in terms of those with biggest gaps are in financial services, including Virgin Money (32.5%), PriceWaterhouseCoopers (33.1%) and asset management firm Octopus Capital (38.1%).

In addition to financial services, businesses in the construction and information and communication technology sectors are reporting some of the widest gaps, the Financial Times has also reported. They add that a scant 70 employers, or 14.6 percent of those that had released their figures as of earlier this month, reported negative pay gaps as of January 1, most of which are smaller organizations working in health care and education. Nationwide, the median gender pay gap stood at 18.4 percent for all employees and 9.1 percent among full-time employees only.

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UK Legislator Proposes Ban on Zero-Hours Contracts

UK Legislator Proposes Ban on Zero-Hours Contracts

A member of the Scottish National Party plans to urge his fellow MPs to support a bill in the UK parliament that would ban the use of zero-hours contracts, Emily Burt reports at People Management:

Chris Stephens, MP for Glasgow South West, has urged fellow parliamentarians to back his Workers (Definition and Rights) Bill 2017-19, which will receive its second reading in the House of Commons on 19 January. The SNP MP said his bill would ban zero-hours contracts, boost employment rights for gig economy workers and protect younger workers in an increasingly uncertain economy. …

Under the draft bill, a worker could only be employed on zero-hours terms where there was a specific agreement with their trade union. This goes further than recommendations made in Matthew Taylor’s Good Work: The Taylor Review of Modern Working Practices, made earlier this year, which held back from endorsing a ban on zero-hours contracts, which it said would damage both employers and workers.

Instead, the Taylor Review had suggested introducing a higher minimum wage for employees on zero-hours and other flexible contracts. Stephens’s bill targets the issue of income stability among the UK workforce, but also comes in response to anxieties over the future of employment law in the UK after Brexit:

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Report: Top UK CEOs Earned the Average Employee’s Annual Salary by Thursday

Report: Top UK CEOs Earned the Average Employee’s Annual Salary by Thursday

An analysis released this week by the CIPD and the High Pay Centre highlights the extent of income inequality in the UK by comparing the compensation of FTSE 100 CEOs to that of Britain’s average full-time employee, the Guardian’s Rupert Neate reports:

The chief executives of FTSE 100 companies are paid a median average of £3.45m a year, which works out at 120 times the £28,758 collected by full-time UK workers on average. On an hourly basis the bosses will have earned more in less than three working days than the average employee will pick up this year, leading campaigners to dub the day “Fat Cat Thursday”. …

The analysis … shows chief executives of FTSE 100 companies are paid an average of £898 per hour – 256 times what apprentices earn on the minimum wage.

The ratio between the pay of the CEO and the average employee (the definition of which is a matter of some controversy) is becoming a widely accepted standard for measuring income inequality within organizations and societies. As the pay gap between top executives and the rank and file has grown in recent decades, spurred on in some cases by tax loopholes, activists have decried this trend as evidence that CEOs are overpaid, while employees are not receiving their fair share of growing corporate profits.

In an effort to address inequality and curb CEO pay packages deemed excessive, the UK government has proposed new laws that will require listed companies to publish and justify their CEO-to-median-employee pay ratios, along with “naming and shaming” companies whose shareholders object to executive compensation plans as determined by the board. A similar disclosure rule was adopted in the US by the Securities and Exchange Commission in 2015, which will require public companies to publish their pay ratios in their proxy statements, starting with the 2017 fiscal year. Portland, Oregon has gone a step further and imposed a surtax on companies doing business in the city whose CEOs earn more than 100 times their median employee.

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‘Unlimited Fines’ for UK Employers Who Dodge Gender Pay Gap Reporting

‘Unlimited Fines’ for UK Employers Who Dodge Gender Pay Gap Reporting

The UK’s Equality and Human Rights Commission on Tuesday unveiled its enforcement plan for ensuring that organizations required under new regulations to publish their gender pay gap data do so by the deadline of April 4, 2018:

The Commission’s policy – which is open for consultation from today until 2 February 2018 – explains how the Commission will use a range of its powers:

  • it may investigate suspected breaches of the regulations by private and voluntary sector employers and offer them the opportunity to enter into a formal agreement to comply as an alternative to continuing with the investigation. Such agreements can themselves be enforced if not complied with
  • it may issue unlawful act notices against employers who do not accept the offer of an agreement and who are found to have breached the regulations as a result of the investigation. These unlawful act notices will require employers to comply with an action plan which can be enforced through court orders
  • it may seek summary convictions and an unlimited fine to those who still refuse to comply with a court order

Similar enforcement powers exist in relation to public sector employers.

The reporting mandate, which went into effect this past April, applies to all organizations with over 250 employees, who must publicly report any gender gaps in their pay data based on a “snapshot” of pay data from the year leading up to April 5. Employers have been slow to report, perhaps out of fear that attention to their pay gaps will harm their reputation and ability to attract talent. Among those that have reported, those that published suspiciously small or nonexistent pay gaps have had their data scrutinized in the press and in some cases amended their reports afterward.

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Americans Intend to Check In Over the Holidays, While the UK Has Already Checked Out

Americans Intend to Check In Over the Holidays, While the UK Has Already Checked Out

Although more than four in ten US employees are planning to take a vacation over the coming holidays, most Americans will remain either fully or partly connected to their jobs during the last week of the year, according to a Gallup survey released on Monday:

This holiday season, 43% of U.S. workers say they plan to take a vacation during the holidays, and of that group, roughly half — or 21% of all workers — will completely disconnect from work. Meanwhile, 22% of workers will be taking a vacation but checking in with work via email or other means. …

U.S. workers are more likely to say they plan to take holiday vacation time than they were when Gallup last asked the question, at the beginning of the millennium. The 43% of U.S. employees who plan to take vacation time this holiday season is up from about a third of workers (34%) in 2000. Even with the increase, a majority of U.S. employees (57%) are not taking vacation time around the holidays.

Even if employees are in the office, the last week of the year is a notoriously slow time for many businesses as so many employees (and clients) are either on vacation, distracted by holiday events, or simply not working very hard. This has prompted some commentators to argue that businesses should simply shut down between Christmas and New Year’s Day rather than endure a guaranteed low-productivity workweek.

In the UK, meanwhile, a survey by Peakon finds that 57 percent of employees are either formally or informally finished working for the year, Sara Bean reports at Workplace Insight:

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Some UK Companies Reporting ‘Implausible’ Gender Pay Gaps

Some UK Companies Reporting ‘Implausible’ Gender Pay Gaps

Among the UK companies with over 250 employees that have already published their gender pay gap data in line with a new rule that came into effect in April, one in 20 have reported numbers that are “statistically improbable and therefore almost certainly inaccurate,” according to an analysis by the Financial Times.

The newspaper’s Billy Ehrenberg, Aleksandra Wisniewska, and Sarah Gordon report that 15 companies in various industries had reported an average pay gap of zero, claiming to pay men and women identically for the same work, as measured by both the mean and the median. Pay experts, however, told the FT that it was “highly anomalous” for a company of this size to have identical mean and median pay gaps, because of the different ways in which these averages are measured. Additionally, eight of these companies reported having roughly equal numbers of men and women in each of the four pay quartiles, which also strains credulity.

The upscale fashion house Hugo Boss, which has 900 UK employees, actually changed its official submission after the paper challenged the company on its unusual figures. Whereas its original submission said it had no pay gap of any kind, its amended report showed a mean gender pay gap of 32.6 per cent and a median gap of 76.5 per cent.

While these revelations are disconcerting, suggesting that some companies may be trying to game the reporting system and conceal real discrepancies, some inaccurate reports may also reflect mathematical errors made by companies in calculating their pay gaps. Rob Moss at Personnel Today talks to one expert who says the misreporting problem may be even worse than what the FT uncovered, even if employers are not intentionally fudging their figures:

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Preliminary Brexit Deal Secures EU Citizens’ Right to Remain

Preliminary Brexit Deal Secures EU Citizens’ Right to Remain

An agreement reached before dawn on Friday in the first phase of Brexit talks between the UK and the European Union will preserve the rights of EU citizens currently living, working, and studying in the UK, as well as their British counterparts in Europe, Rob Moss reports at Personnel Today:

Theresa May said that EU citizens living in the UK would have their rights “enshrined in UK law and enforced by British courts”. But the agreement, published this morning, says the European Court of Justice will continue to have a role in overseeing their rights for eight years after Brexit – until March 2027. Guarantees will also apply to UK citizens living in other EU countries. …

There are around three million EU citizens living and working in the UK. The joint report states that the objective of the UK’s Brexit agreement is to provide “reciprocal protection for Union and UK citizens, to enable the effective exercise of rights derived from Union law and based on past life choices, where those citizens have exercised free movement rights” by the time of the UK’s withdrawal.

That EU citizens in the UK (and vice versa) would be granted the right to stay has been known since June, and many observers expected the Brexit agreement to include such a provision from the start. What remained uncertain was when these protections would be cut off: Originally, the government had proposed to limit eligibility for “settled” status to those living in the UK on the day the Brexit process was triggered (March 29, 2017), but May left open the possibility of changing it to the day Britain leaves the EU in 2019. Friday’s agreement appears to reflect the EU’s preference of the later date.

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