Gender pay gap: proposal for changes in reporting requirements

‘Gender pay gap’ - three small, but very powerful words, has pushed equality up the political agenda.

A recent survey by the Office for National Statistics (ONS) revealed that the average woman earns 9% less than men, and now the government is welcoming suggestions on how employers can be more transparent about their equal pay policies to create a 'genuine culture change' and see the number of women promoted to more senior positions increase.

The Business, Energy and Industrial Strategy (BEIS) Committee believes the reporting requirements should be extended to organisations with 50 or more employees from April 2020.

Rachel Reeves MP, Chair of the Business, Energy and Industrial Strategy Committee said:

"Gender pay reporting has helped to shine a light on how men dominate the highest paid sectors of the economy and the highest paid occupations within each sector. Our analysis found that some companies have obscene and entirely unacceptable gender pay gaps of more than 40%. Transparency on gender pay can only be the first step.”

This is now prompting employees to openly discuss their pay with their co-workers, and women across the UK are doing just that to keep the debate top of mind with events such as 'Equal Pay' Day in November.

The BEIS recommended the following:

• Include counting partners in calculations (not currently included as they take a share of profits instead of salary).
• Calculating on a pro rata basis e.g. if the annual full time salary is £39,000, but your expected to work only 20 hours a week (half of the average 40 hours of a full time worker), then your pro rata salary would be £19,500 (50% x £39,000).
• Organisations should publish an explanation of their pay gap, report gender pay data and present an action plan on how businesses aim to reduce the gap.  

Nevertheless, organisations may be reluctant to release such information, deeming it 'sensitive', making them vulnerable to reputational risk. This is because data would become publicly available, meaning media outlets are free to offer their own opinions and analysis on any information released. Shifting the focus to employers could prove to be damaging, especially if changes are not made within an organisation.

Overall, continuing action against gender pay differences will be a positive movement towards bringing equality into the workplace - one that is long overdue!