HMRC have updated their Gender Pay Gap reporting guidelines.

The guidance starts as follows:

It is important for you to be sensitive to how an employee identifies their gender. The gender pay gap regulations do not define the terms ‘men’ and ‘women’.

Pardon?

The whole point of gender pay gap reporting with its mandatory introduction in 2017 was to narrow and eventually eliminate the pay difference between men and women. It is called gender pay gap reporting for goodness sake!

Why do we need the gender pay gap report?

If we can no longer define those terms in the lexicon of gender, perhaps we need to redefine the regulations?

Pay gap is fundamentally unfair, to not adequately remunerate someone because of their gender (or views or beliefs on gender) in the modern workforce is abhorrent.

However, if we can no longer report on the issue accurately the way the current regulations are framed, how on earth will we ever get the pay gap right.

No, I am not for one second suggesting people who do not identify as the sex they were assigned at birth, or who do not recognise gender should be left out of the equation, pay gap should absolutely be eliminated where present in those circumstances as well, but this requires another layer to the reporting to truly identify any inequality that is present.

It totally undermines what the gender pay gap was originally designed to achieve if those reporting do not recognise gender. If the workforce has evolved, so therefore our methods of reporting and what we capture also needs to evolve.

Additional reporting requirements could be put in place to make the position more accurate and capture true inequality such as pay gap reporting in the traditional sense between males and females, but also capturing in additional layers inequality between those categories and those who either do not recognise gender or who wish to identify as another gender(s) or do not wish to identify with the gender they were assigned at birth.

Let’s capture it all, and show true inequality where it exists, but attempting to fudge the current regulations in the way that HMRC seem set on doing is bonkers.

What are the current gender pay guidelines?

The current guidance states that if an employee wishes to identify in the reporting as another gender they are free to do so. The ability for this to be open to abuse and for skewed results showing in particular LESS of a pay gap is clear to be seen. All HMRC states is that if someone wishes to identify differently for the gap reporting they can, leaving open the opportunity for the more salacious operators to frame high earning males (where there could well be a significant gender pay gap) to report as women. There is certainly an incentive to do this when in 2023 the House of Commons reported that 79% of reporting employers stated that the median hourly pay was higher for men than women.

Where something is open to abuse, you can trust it will happen. Its why we have lawyers.

Worse still, if someone doesn’t identify as any gender, HMRC suggests we leave them out.

Leave them out? Their pay gap or experience in discrimination not counting for anything then?

What should pay gap reporting look like in 2024?

This is why a closer look needs to be taken at how we present pay gap reporting in 2024. Perhaps we call it exactly that, pay gap reporting, and find a mechanism to show the true inequality in pay in business – the idea being to really hold a mirror up to what is going on and allow it to be addressed and fixed. Which is after all the whole point of pay gap reporting, pay equality. For Everyone.

If we allow figures to be distorted and only partially collated we are on a slippery slope.

The Telegraph has reported that Business Secretary Kemi Badenoch is now looking at the issue with press murmurings that it will be based on biological sex at birth, which may well solve the issue at hand in terms of interpreting the regulations but does nothing to identify any inequality issues experienced in respect of pay by those who identify as a different gender, or no gender at all.

For information the current HMRC guidance is available here:

Recording employees’ gender

It is important for you to be sensitive to how an employee identifies their gender. The gender pay gap regulations do not define the terms ‘men’ and ‘women’.

You should not single out employees and question them about their gender. To reduce the risk of this, try to use information employees have already provided, such as in HR or payroll records.

If this information is unavailable or unreliable, find a way to allow employees to confirm or update their gender. For example, invite them to check their recorded gender and update it if needed.

If an employee does not self-identify as either gender, you can exclude them from your calculations.

Are you ready to become your workplace hero?

While the intention of narrowing the pay gap between men and women is clear, the evolving landscape of gender identity necessitates a more nuanced approach. The existing guidelines fail to adequately address the complexities of modern gender identities, potentially leading to skewed results and overlooking crucial inequalities.

Need expert help in defining your gender pay roles? Contact us for a free consultation with our top-level CIPD advisors today!