Government unveils gender pay gap reporting rules for large employers
League tables set to highlight poor performers in a bid to drive change
From 2018, companies with more than 250 employees will be required to make their gender pay gap publically available online, the government has announced.
Employers that fail to address gender pay disparities will also be highlighted in new league tables intended to drive progress.
As part of the long-awaited draft regulations on gender pay gap reporting, women and equalities minister Nicky Morgan said as well as forcing medium to large sized companies to publish their gender pay and bonus pay gap details on an annual basis, organisations will also be forced to publish how many women and men are in each pay range.
To highlight where the gap falls across the UK, companies’ pay gaps will be ranked by sector, in a league table that will allow women to see where the gap is and is not being addressed.
Morgan said she was “calling on women across Britain to use their position as employees and consumers to demand more from businesses, ensuring their talents are given the recognition and reward they deserve”.
According to the latest ONS Annual Survey of Hours and Earnings, the gender pay gap for median earnings of full-time and part-time employees combined stands at 19.2 per cent, unchanged since 2014. At this current rate of change the TUC predicts it’ll take 47 years to reach gender pay parity across the UK.
Kathryn Nawrockyi, gender equality director at Business in the Community, said compulsory reporting would lead to a reduction in bias and introduce greater transparency in decision-making, not only in pay, but in recruitment, performance appraisals and promotion decisions.
“Asking employers to publish earnings distribution by quartile will clearly show where there are too many men at the top of organisations and too few women,” she said.
But Frances O’Grady, general secretary of the TUC said there was “no need” to delay the reporting until 2018, and suggested that bosses should be made to explain why pay gaps exist in their organisation, rather than just publishing an annual figure.
While the CIPD welcomed the additional reporting details announced by the government, Dianah Worman, diversity adviser at the CIPD, said the institute was “concerned about the use of league tables across economic sectors to highlight problems”.
“It could disincentivise women from exploring opportunities in the very areas government wants to see more women working in, to remove the gender pay gap,” she said. “Also, the use of naming and shaming as a sanction against organisations for failing to report what they find could also hinder meaningful and sustainable change. It might encourage quick fixes which could be inaccurate reflections of real progress.”
Morgan said a new £500,000 support package would be introduced to help companies implement the regulations, and a new ministerial group will be set up to evaluate how the government supports women into work.
There will also be targeted support for male-dominated industries such as STEM, where the government has also pledged to see an extra 15,000 entries by girls to maths and sciences by 2020 – a 20 per cent increase on current numbers.