A step closer to gender pay equality

Jo Faragher

There was big news for gender equality campaigners this week when the Government published the preliminary consultation on its proposals for mandatory pay gap reporting in large companies.

From next year, the new rules will require employers in the private and voluntary sectors with at least 250 employees to publish information about the pay of their male and female employees.

Although it is yet to be decided how employers will present this information – for example whether it should be a single figure showing the difference between average earnings for both sexes, or differences by grade or job type – the proposed legislation has been welcomed. The CBI, for example, said that “addressing the gender pay gap is the right priority”.

However, the CBI has also implored the Government to ensure that the final regulations do not create a burden of red tape for employers, and crucially that the data does not mislead potential customers or candidates.

There is also a perhaps unintended risk that – in order to make their gender pay gap look better – some companies may choose to outsource or make redundant low paid work which is often carried out by women. In many companies, the majority of those in management are men and on disproportionately large salaries, so culturally the gap will take a long time to get smaller.

It will also be hard to see from a single figure on average pay data where there are nuances such as more women choosing to work part-time, or how one-off rewards such as joining bonuses have impacted the overall picture.

That said, it cannot be denied that this is a positive move that will shake up the working cultures of many businesses, making them mindful of paying people based on their role and their output rather than their gender and what they expect as a man or a woman in that job. The voluntary approach has worked well so far in terms of getting more women into director roles, but this will ensure that more working women achieve parity in what they’re paid.

The current consultation closes in September, with a further one to follow, so we will have the full details next year.