U.K. and Germany: Combatting the Pay Gap
Pay equity continues to be a topic to discuss! For example, numerous states have recently issued new pay equity laws or strengthened their existing ones (for example, California, Maryland, New York, and Oregon, to name a few). This emphasis is also seen at an international level. We highlight some global pay equity trends by reviewing recent developments in pay equity law in other countries. Specifically, in the United Kingdom (U.K.) and Germany, there has been a recent push for employers to report information regarding their gender and pay.
The “Gender Pay Gap 2010 (Gender Pay Gap Information) Regulations 2017” is legislation passed in April, 2017 that requires employers with 250 or more employees to report information about gender and pay. These employers must publish the following information on a yearly basis:
- mean and median gender pay gap
- mean and median bonus gender pay gap
- the proportion of men to women in different pay quartiles (lower, lower-middle, upper-middle, and upper)
- proportions of men to women who were given bonuses
Because this was passed last year, the first “round” of data must be published by April 4th, 2018. This is to be done in two ways: both on their websites and more formally in a report to the government using a gender pay gap reporting service. This requirement to publish company data is intended to promote transparency and increase awareness of a company’s own gender gap.
Similar to the Pay Gap regulations in the U.K., Germany has passed their own Pay Transparency Act (PTA) to demystify pay policies within organizations and combat their wage gap.
The most notable piece of Germany’s PTA is the “Individual Right to Information” which grants employees the right to request the salary information of their colleagues– including the underlying factors used when determine pay.
The PTA also requires that organizations release progress reports every 5 years and introduce an internal auditing system to ensure pay structures are equitable and comply with the law. German companies should expect to release their first pay gap report in 2018.
With both the U.K. and German Pay Equity Acts set to begin this year, companies operating in those countries should strategically assess their current compensation models. These are just two examples of new, international pay equity laws, and other countries are following suit (e.g., Iceland). DCI will continue to monitor the roll out of these new laws and any additional pay equity legislation that follows!
By Juan Carlos Batarse, Consultant, and Macy Cheeks, HR Analyst, at DCI Consulting