Definition
The percentage difference between the average hourly earnings of men and women across an organisation, which UK employers with 250 or more employees are required to calculate and publish annually.
UK Context
Gender pay gap reporting is mandatory for UK employers with 250+ employees under the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017. Data must be published annually by 4 April (private and voluntary sector) or 30 March (public sector). The Equality and Human Rights Commission can take enforcement action against employers who fail to report. The UK's median gender pay gap is approximately 14.3% (2024).
Best Practices
- Publish the mandatory data on time and accompany it with a clear narrative and action plan
- Analyse the gap at a granular level by department, grade, and role to identify specific drivers
- Review recruitment, promotion, and pay decision processes for potential gender bias
- Improve flexible working availability and take-up across all levels of the organisation
- Set measurable targets for reducing the gap and track progress year-on-year
Frequently Asked Questions
Is the gender pay gap the same as unequal pay?
No, they are different concepts. The gender pay gap compares the average pay of all men and all women in an organisation, regardless of their roles. Equal pay compares the pay of men and women doing the same or equivalent work. An employer can have a gender pay gap even if it pays men and women equally for equal work, if men occupy more of the higher-paid roles.
Which employers must report their gender pay gap?
UK employers with 250 or more employees on the snapshot date (5 April for private and voluntary sector, 31 March for public sector) must publish their gender pay gap data annually. This includes full-pay relevant employees, which excludes those on reduced pay due to leave.
What penalties exist for not reporting?
The Equality and Human Rights Commission (EHRC) can take enforcement action against employers who fail to report, including issuing unlawful act notices and entering into legally binding agreements. While there is no automatic financial penalty, failure to comply can result in court action and significant reputational damage.
How can an employer reduce its gender pay gap?
Common strategies include improving female representation in senior roles through targeted development and sponsorship programmes, reviewing recruitment practices for bias, enhancing flexible working at all levels, ensuring pay decisions are transparent and evidence-based, and supporting returners from career breaks.