Top HR lawyer reveals the big issue with new gender pay gap reporting rules

Lewis Silkin partner Colin Leckey spoke to IBTimes UK about the regulations.

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Large businesses in Britain risk giving a "distorted" picture of the pay gap between male and female co-workers because of new reporting rules, a leading HR lawyer told IBTimes UK on Wednesday (5 April).

The warning comes as around 9,000 companies with more than 250 employees are expected to publish their median and mean gender pay gap figures as well as data on bonuses. The regulations, which came into force today, cover 15 million workers in the voluntary, private and public sectors.

Colin Leckey, a partner at Lewis Silkin, said the figures could prove "meaningless" since businesses have been asked to "aggregate" their workforces rather than compare salaries on a like-by-like or grade-by-grade basis.

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"The headline figures for most companies – this is certainly our experience from dry-runs we've done – will look pretty bad," he said.

"They will tell you that you've got a headline gender pay gap of 10% or 15% or 20% and that you've got a headline bonus gap of 40% or 50%."

Leckey added: "[The rules do not] account for the fact that in most companies senior management is predominantly male and the junior, clerical and administrative staff are predominantly female.

"You end up with this distorted picture, whereas in most organisations if you look at like-for-like comparisons the picture may be much brighter."

The top HR solicitor said the government has set out the regulations to "make employers' lives easy", but ministers could have unintentionally created a "bigger problem" for businesses.

"Because they don't compel them to present what actually what might be a more attractive picture for them," Leckey explained.

He also revealed a "significant" number of companies have left the reporting obligations until the last minute, while other firms have prepared a year in advance with "dry-runs".

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The UK is one of the first countries to require companies to report gender pay gap figures and the government has estimated that eliminating gender pay gaps could add £150bn ($187bn) to annual GDP by 2025.

"We have more women in work, more women-led businesses than ever before and the highest proportion of women on the boards of our biggest companies," said Justine Greening, the women and equalities minister.

"This has helped us to narrow the gender pay gap to a record 18.1% – but we want to eliminate it completely.

"Helping women to reach their full potential isn't only the right thing to do, it makes good economic sense and is good for British business. I am proud that the UK is championing gender equality and now those employers that are leading the way will clearly stand out with these requirements."

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