The rush prior to the 4 April deadline for private businesses with more than 250 employees to publish their gender pay gap report may seem like a distant memory to most. However, according to a recent independent statistician's report, as many as one in six organisations misreported their pay gap and may now need to revisit their reporting methodology.

By way of recap, the report had to include the following data:

  • The proportion of men and women in each of the four pay quartiles.
  • The gender bonus gap – the difference between men's and women's mean and median bonus pay over a 12-month period.
  • The proportion of male and female employees who received a bonus in the same 12-month period.
  • The overall gender pay gap figures, calculated using both the mean and median average hourly pay.

The figures also had to be supported by a written statement from an appropriate senior individual confirming the information was accurate.

Over 10,000 organisations published their reports by April and the headline numbers have certainly caused a stir.  The data showed that 78 per cent of large organisations pay men more than women and that the national median gender pay gap stands at 9.7 per cent (a blog post on other figures released can be found here).

Now an independent statistician, Nigel Marriott, has suggested that between 9 and 17 per cent of gender pay gap data is wrong. Marriott has identified, among other things, inconsistency between the ACAS guidance and the Gender Pay Gap Regulations as a contributing factor to employers' confusion.

Marriott has highlighted a number of common errors and statistical impossibilities. For instance, 937 organisations reported a median gender pay gap of zero, which could only be correct if the male quartile gap is also virtually zero. As Marriott describes, if a company is reporting a positive median gender pay gap, then this must imply that the sum of the percentage of men in the upper and upper middle quartiles should be greater than the sum of the male percentages in the other two quartiles. Yet over 500 organisations have reported relatively large male quartile gaps and at the same time have claimed to have a zero median gender pay gap.

Two organisations reported their gender pay gap as being greater than 100 per cent, which is impossible unless women are actually paying for the privilege to work at their respective companies. Organisations have also been entering their income quartiles the wrong way around, inputting +9 per cent rather that -9 per cent for example.

Many commentators have argued that in future reporting cycles errors would be reduced if pay gap data were presented in the more intuitive pound and pence format instead of percentages e.g. women make 51p for every £1 that men make. This change has also been championed by a recent report from the Government Equalities Office, which found that data was better understood when shown this way.

Whilst an error rate of this scale is perhaps not a surprise given that this is the first year of companies publishing their findings, it is clear that further guidance must be produced for employers. Only time will tell if such guidance will be forthcoming, but in the meantime it is understood that the Equality and Human Rights Commission is contacting organisations that have filed questionable data and asking them to correct or explain their reports or risk being taken to court, where they could face unlimited fines.

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