Gender pay gap reporting to include bonuses

Nick Elvin

Larger employers will have to publish information about their bonuses for men and women as part of their gender pay gap reporting, under new government proposals.

The planned legislation, aimed at eradicating gender inequality in the workplace, would apply to employers with more than 250 employees, and follows on from the announcement by the Prime Minister in July of plans to force large companies to publish information about the difference between average male and female earnings.

The new proposals include the extension of pay gap reporting beyond private and voluntary sector employers to include the public sector.

The Government would also work with business to eliminate all-male boards in the FTSE 350.

A consultation which concluded in September asked employers and employees for their views on how, when and where the data should be published. New regulations which set out how this will work in practice will be set out in due course.

CEO of the Chartered Management Institute, Ann Francke said: “One of the biggest drivers of gender pay discrepancy, especially at senior levels, is the bonus gap. Bonuses are also where gender bias can creep in easily as they are amongst the least transparent forms of pay.

“There’s a tendency to reward those in our own image or to think that because men may be the ‘main breadwinners’ they deserve higher bonuses. And men often negotiate harder or trumpet their achievements more readily.

“The Government’s new reporting legislation is a welcome step forward and will be good news for business. Clearer employee data, improved recruitment and a reinvigorated focus on business culture will help unblock the talent pipeline and support more women to become senior managers and leaders.”

Neil Carberry, CBI director for employment and skills, said eradicating the gender pay gap is an important goal, but to be truly effective, gender pay gap reporting must be relevant to each company rather than a “box-ticking exercise”.

TUC general secretary Frances O’Grady added: “Publishing information on gender pay gaps in salaries and bonuses is a start. But it is just that – a start. Employers need to look at why women are still being paid less than men and do something meaningful about it.

“If the Prime Minister is serious about ending the gender pay gap within a generation he must not delay mandatory pay gap reporting and he should extend the law to medium-size companies as well as large employers. And companies that don’t comply with the law should be fined.”