Co-op gets ahead of the game with socio-economic pay gap reporting

The Co-op has recently become the first retailer to publish a socio-economic pay gap report. 

Whilst Labour has not announced any proposals to require employers to report socio-economic pay gap data, other proposals in relation to the socio-economic duty and gender pay gap reporting form part of the now Labour government’s Plan to Make Work Pay.

The Co-op has stated that its findings will inform the business’ social mobility strategy and the actions needed to close its pay gap.

The socio-economic duty

Labour has announced that it will enact the socio-economic duty under section 1 of the Equality Act which will apply to public bodies.

The socio-economic duty provides the power to put in place a public sector duty regarding socio-economic inequality (with socio-economic disadvantage being treated as low income, low wealth, material deprivation and area deprivation). The aim is to deliver better outcomes for those who experience this disadvantage.

The socio-economic duty came into force in Scotland in April 2018 and in Wales on 1 April 2021 but, despite forming part of the Equality Act, has not yet been implemented in England or Northern Ireland.

Gender pay gap reporting

Mandatory gender pay gap reporting for many large public sector employers and large private and voluntary sector employers (those with 250 or more employees on 5 April each year) was introduced in 2017.

Broadly, affected employers must publish:

• Overall gender pay gap figures for relevant employees, calculated using both the mean and median average hourly pay
• The proportion of men and women in each of four pay bands, based on the employer’s overall pay range
• Information on the employer’s gender bonus gap
• The proportion of male and female employees who receive a bonus in the same 12-month period
• A written statement, signed by an appropriate senior individual, confirming that the published gender pay gap information is accurate

Labour plans to require large firms to develop, publish and implement action plans to close their gender pay gaps. In an attempt to tackle what it refers to as ‘glaring inequalities’, it also intends to make the publication of ethnicity and disability pay gaps mandatory for employers with more than 250 staff.

Comment

Many employers are already choosing to report their pay gaps more widely than is legally required, by providing a wider breadth of information, reporting on pay gaps in more categories than gender alone and by publishing action plans to close their gender pay gaps.

Employers with more than 250 staff are advised to start considering how they will collate pay data in relation to ethnicity and disability, with a view to reporting on this alongside gender, in the near future.