Despite the Equal Pay Act being introduced nearly fifty years ago, it appears that the gender pay gap is still ever present. In light of International Women’s Day 2016, Keystone’s employment lawyers, take a look at this topical issue and provide their thoughts.
As of next year, every company in Britain with over 250 employees will be legally obligated to reveal the existing gap between the sums that men and women are paid. Recent data from an analysis by recruitment company, Robert Half, has shown that women are still likely to receive £300,000 less than their male counterparts, over the course of their careers. According to the Government, this is one of its first endeavours on the road to eliminating the problem of pay inequality. It argues that a naming and shaming style approach will encourage improved pay rates and greater equality for women. But is this alone likely to solve the problem?
The Equal Pay Act
Under the Equal Pay Act 1970, it is currently illegal to pay men and women different sums for doing the same job. But estimates argue that the pay gap currently stands at 24% for full and part-time workers in the UK, equating to a £5,732 difference. “In the, almost, fifty years since the introduction of this Act, we have all stood by and watched as pay equality has slowly edged towards a still disappointingly poor gulf in pay between men and women, More a trickle of a stream than a sea of change!" says Michelle Last.
"I suspect the new gender pay reporting obligations will simply demonstrate what we already know: pay inequality permeates all aspects of society, whether public or private, multinational or start-up.”
Accessibility and enforcement
While existing laws and regulations may already be in place, David Jepps argues that the real issue lies in providing the right tools for women to take action against unfair pay. “The infamous recorded message of “mind the gap” often overheard at Tube stations has never been so poignant. These recent figures show that there is still a substantial pay gap between men and women. However, equal pay claims are complex and therefore expensive. They tend to be brought with the help of unions for groups of employees. Individuals are often concerned with the issue of cost as well as, potentially, further hampering their already stressed career prospects. With much lower union membership now than in 1970 paired with ongoing economic pressures, unfortunately, many female employees will be minding the gap for the foreseeable future.”
As an employer, how might I be affected by the new legislation?
The first rankings will be published in 2018. However, if you are either a private or voluntary sector employer with 250 “relevant employees” you will have to begin calculating the pay gap for your business as of 30 April 2017 and every 30 April thereafter.
Brian Palmer recognises that no right-thinking person will argue against equal pay for equal work. However, he says: “Mandatory publication of raw data and ranking in a league table as a result is controversial. Employers will be concerned as to the extra burden on businesses, especially those with complex pay structures. “Naming and shaming” on raw data may only show a partial picture and ignore the impact of flexible working or structural issues in different sectors. From a PR perspective (both externally and with regard to staff), employers may well want to take up the option of publishing a narrative explaining any pay gap on the raw data and setting out any initiatives which the employer is undertaking to resolve any apparent issues. This will also assist in resisting any equal pay claims. In any event, the regulations are here to stay and the pay analysis will take time to complete, particularly for larger employers with complex pay structures. That process should be started promptly in order to establish the level of any pay gap and to create an action plan to tackle any issues revealed.”
Since the introduction of Shared Parental Leave, it could be argued that the UK has made some headway in its bid to eliminate the gulf between men and women in the workplace. But the country currently languishes in just 16th place according to rankings on gender equality in the workplace, by PwC, while Iceland, Norway and Sweden blaze a trail in the top three spots.
Jacqueline McDermott shares her disappointment over the fact that there is still such a large gender pay gap. “I am sure this will not come as a surprise to many women. While the Government has introduced this new legislation requiring businesses to publish details of salaries and bonuses paid to male and female staff, it will not come into force for some time. It also threatens to be a fairly toothless piece of legislation as it is currently unclear how or if it will be enforced, as the Government has no current plans to impose fines on employers who fail to comply. Much more needs to be done to close the gender pay gap.”
Should we be taking a different approach?
With PwC’s findings suggesting that there is a significant link between the number of women in the workplace, particularly in senior roles, and their earnings – perhaps the UK should be taking more of a lead from its Nordic counterparts. Rather than merely implementing reporting standards for employers, a more proactive method to facilitate total social change might be the answer. Greater opportunity for women to return to the workplace after giving birth, free childcare provision and flexible working policies could all play a key role in finally bridging the gap.
This article is for general information purposes only and does not constitute legal or professional advice. It should not be used as a substitute for legal advice relating to your particular circumstances. Please note that the law may have changed since the date of this article.