Companies with more than 250 employees will be obliged to publish their gender pay gap data from April 2018, the government has announced.
Large organisations will have to disclose how much they are paying in salaries and bonuses to their male and female staff. The reporting regulations will require them to divide their pay distribution into four bands and work out the number of men and women in each quartile.
The Office for National Statistics (ONS) estimates that the pay gap currently stands at 19.2% for workers in the UK, meaning that on average a woman makes around 80p for every £1 earned by a man.
Education secretary and minister for women and equalities Nicky Morgan said the business case for closing the gender pay gap is clear. “This is not only the right thing to do but it’s also important for our country,” she said. “The UK economy is dependent on us harnessing the talent of women; capitalising on the wealth of skill that they bring to our workplaces.
“Together we can continue to drive change and dispel the myths that have often stalled progress.”
However, TUC general secretary Frances O’Grady warned that the reporting may not go far enough. “It is a real shame that bosses won’t be made to explain why pay gaps exist in their workplaces and what action they will take to narrow them,” she said.
“Employers can’t be allowed to treat this as a tick-box exercise. They must open their books and explain what they are doing to address their pay gaps. Failure to comply must result in tough sanctions and fines."
Regina Moran, CEO of Fujitsu UK & Ireland, said that it is important companies go further than eliminating biased pay structures. “Differences in pay are often part of a wider context, as businesses fail to create environments that support women in the long term,” she said. “This results in lower retention rates for women and ultimately in fewer women in the top positions.
“Organisations must tackle not only unfair pay, but discriminatory cultures. Measures such as women’s networks and mentoring, as well as flexible working arrangements, are vital in supporting women through their career. Firms must also be aware of and eliminate any subliminal bias in hiring, promotions and pay rises.
“Ultimately businesses must be vocal in acknowledging the advantages of a diverse, multi-skilled workforce for keeping them innovative and successful,” she added.
Helen Corden, legal director in the employment team at Pinsent Masons, warned that publishing this data could have the adverse effect of putting female talent off certain sectors. “League tables will create a real risk of deterring the next generation of female talent from entering industries they believe could prevent them getting the same recognition as their male counterparts,” she said. “Businesses must take action now as it’ll require significant investment on their part to eliminate any misconceptions.”
