Firms warned to be aware of pay gap pitfall

COMPANIES should be aware of a hidden pitfall in new legislation regarding equal pay that comes into force next month, an Upton law expert has warned.

From April 6, private sector companies with 250 employees or more will be required to report the differences in both hourly and annual pay between full-time male and female staff.

But Milners Law is urging businesses to explain any disparities in pay.

The new legislation requires employers to publish the information on their own websites every year.

Jodie Hill, a commercial and employment law specialist at Milners, said it could prove a legal minefield for some companies.

She said: “The press, public and pressure groups will be casting a forensic eye over the data and the window it now offers into staff pay.

“Firms risk exposure to bad PR and damage to their reputation if they fail to seize the initiative and properly explain the reasons for the disparity. Such a narrative is voluntary but we would strongly encourage employers to include one on their website.

“It affords an important opportunity to provide context for their data, explain any gender pay gaps, and offer reassurance about the actions being taken to narrow the gap. Businesses that fail to publish an explanation, or choose not to do so, are particularly vulnerable to adverse comment or being ‘named and shamed’ as it may appear that they have something to hide or their figures may be misinterpreted.”

As well as mandatory publication of pay differentials on their own website, individual company data will also be made public on a dedicated government website.

The first reporting date is set for April 4, 2018.