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Lack of sanctions 'makes a mockery' of gender pay gap reports | Society



Uncertainty figures and a lack of sanctions risk making a "mockery" of the gender pay gap reporting system, critics have warned following an in-depth Guardian analysis of submissions.

Amid concerns that a lack of transparency and inaccurate reporting is undermining efforts to address pay inequality, mathematically impossible gender pay gap data filed by companies for the past year has yet to be corrected.

And with less than a month to go before this year's reporting deadline, the Equalities and Human Rights Commission (EHRC) admitted that, despite those failures, no companies have been fined for failing to comply with legislation.

The deadline for companies to report their gender pay gap figures for 2018 is March 30 for public bodies and 4 April for private companies.

However, more than 30 companies are still to file accurate data for the previous 2017 period with the Equalities Office, and a number have filed mathematically impossible figures this year. Analysis also shows more 725 companies have filed or resubmitted their figures since last year's deadline.

Labor's shadow minister for women and equalities, Dawn Butler, said: "Gender pay gap reporting was meant to provide transparency, but the fact that companies have provided incorrect data and faced no sanctions makes a whisper of the entire system."

Responding to a Freedom of Information request, the EHRC, which is responsible for enforcing the gender pay gap reporting rules, said it had sent letters of enforcement to 1,456 companies on April 9, 2018 in relation to the figures of the last year and all companies required to submit data had subsequently filed gender pay gap information. However, unaccurate figures remain on the government portal.

EHRC said they had completed enforcement against 100 employers who submitted suspicious-looking data last year. They said that while they were not currently pursuing enforcement action against any companies that reported last year, that did not mean they could not do so retrospectively. However employers appear to still be filing figures for 2017 as of February 2019.

Days before the reporting deadline last year, the Guardian reported that a number of companies had filed mathematically impossible results, with gender pay gaps of more than 100%. Some companies had entered zeros in all fields, reportedly mathematically impossible bonus gaps and removed key workers from their figures.

EHRC's chief executive, Rebecca Hilsenrath, responded to the figures by saying: "We have mechanisms in place to identify questionable data, and have the power to enforce against any employer whose information published does not meet the legal requirements."

But Guardian's analysis of filings company, which were due on April 4, 2018, show that 35 employers have still filed mathematically impossible figures.

According to EHRC guidance on enforcing gender pay gap regulations: "Employers who submit data that has not been calculated according to the [Gender Pay Gap Reporting] will be in violation of the regulations and subject to enforcement action in the same way those who publish no data at all. "

The organization's enforcement policy says that, in the first instance, they write to organizations that fail to file their gender pay gap information, setting out the law and asking them to comply within 28 days. If an employer fails to do so, the EHRC may eventually apply for a court order, which could then lead to a financial penalty.

Among the companies that missed the deadline for submission or refiled their results for 2017 are the Ministry of Justice, Law Society, Arriva plc and LK Bennett.

pay gaps reported graphic

So far a total of 1,402 companies have reported their gender pay gaps this year, out of 10,000 which are expected to file. Banks have filed some of the most egregious gender pay gap figures. Barclays Bank plc reported a median gap of 44%, meaning on average women are paid 56p for every £ 1 a man earns at the company. That figure widens to a 71% average bonus gap, meaning that average women are awarded 29p to every £ 1 awarded to man in bonus pay.

The bank also disclosed women only account for 19% of its highest paid staff. The data does not show significant changes in the 2017 figures, when the hourly pay gap stood at 43.5% and the bonus gap stood at 73%. There has also been no change in gender diversity among the top earners at the bank.

Lloyds Bank plc reported a median gap of 41.7%, while Royal Bank of Scotland reported a median gap of 36.8%. Lloyds Banking Group reported a pay gap of 32.8% and PricewaterhouseCoopers had a gap of 32.3%.

Butler said that the EHRC should be encouraged to use the full force of its powers to force companies to comply with the law: "News that the gender pay gap is growing in hundreds of companies is extremely worrying and this latest failure in reporting raises serious questions about the government's commitment to tackle this issue. "

"The next Labor government will require employers to publish action plans or face audit or fines. That's how to close the gender pay gap, "Butler added.

An EHRC spokesperson said: "It is a employer's responsibility to ensure that their figures are correct. Our enforcement against data that seemed inaccurate or unlikely has found that they were a result of errors, rather than a deliberate attempt to mislead. We have worked closely with employers to identify and correct errors and have written to those we believe to have inaccurate data.

"This has been a steep learning curve for employers and as they get to grips with the calculations, it is likely that fewer errors will be made. As with any self-reporting law, employers can be asked in any reporting year, to verify their historical figures and face enforcement action if found to be deliberately misreporting. Through our enforcement approach we achieved 100% compliance without the need for costly and lengthy legal process, which is something to celebrate. "


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