Pay gap analysis asks: where are the missing companies?

There may be up to 700 companies missing from the gender pay audits which closed this week, according to an analysis by Lewis Silkin law firm.

It says 9,872 employers published their gender pay gaps by the deadline. That compares with 10,548 employers in 2020. Unless many employers have gone out of business or fallen below the 250 employee threshold for gender pay gap reporting obligations, Lewis Silkin estimates that between 600-700 employers are still yet to publish. The EHRC has said that it will take enforcement action against those employers that have failed to report their gaps on time for two consecutive years.

So far EHRC enforcement action has been limited to the sending of letters and some naming and shaming and Lewis Silkin says its authority to impose fines is “sketchy”.

Overall, the analysis shows 87.7% of employers have mean pay gaps in favour of men, up from 86.5% in 2020, although the gap itself is falling overall. However,  the fall isn’t consistent and employers are seeing increasingly big changes from year to year, possibly due to Covid factors, such as the impact of furlough, and because there is a growing number of smaller employers reporting their pay gaps. The biggest employers have seen the biggest reductions in their gaps and the smallest employers have seen the greatest variability in their gaps, according to the analysis. Usually larger employers have the most difficulty reducing their gender pay gap. Lewis Silkin thinks the change could be due in part to furlough. With lower paid women more likely to be furlough, data used would be drawn more from higher paid women. Other possible reasons include human error and action to reduce their gender pay gaps.

In smaller companies, the analysis warns that gaps will change more each year just by natural fluctuation, with a few people having a bigger impact.

The analysis also finds that mean bonus gaps are slightly up on average. At the same time, there has been a decrease in median bonus gaps. This could be because some employers removed low value bonuses to save money, whereas others were able to take the opposite approach and made special “Covid bonuses” to reward employees during difficult times.

Other findings include the fact that, for the first year, there has been (on average) a small increase in the proportion of men in the lower quartile, although not in the proportion of employers that are hiring more lower paid men. However, Lewis Silkin says it is also possible that this is just a reversal of the drop in the previous year.  2021 was also the first year in which, on average, most employers did not increase the proportion of women in the highest paid quartile.

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