On 6 April of 2017 new legislation covering gender pay gap reporting will come into force, with the law affecting roughly 11 million employees at around 8,000 businesses across the UK. This landmark legislation marks a significant step forward in empowering women and ensuring pay equality regardless of gender.
The law was enacted to address the disparity between men’s and women’s earnings.
The gender gap has started to shrink in recent years, but the legislation is designed to encourage this positive trend as the number of women in higher salaried positions and industries continues to rise. Despite this progress, there are some challenges which remain, chief among them those connected with childbirth.
The gender pay gap as dropped significantly from what was apparent in the middle of the 20th century, reducing from a male/female earnings disparity of 16% to a current gap of just 5% for younger employees. However, the difference increases to 9% among women of childbearing age. Younger millennials may not have noticed much, if any gap at this point, but they may see this start to happen in their 30s.
ONS (Office for National Statistics) offers a tool which allows employees to take a look at the gender gap existing in different jobs, which does reveal some rarer cases which do not follow the wider trend. For instance, female probation officers, physiotherapists and traffic wardens may earn as much as 25% more than their male counterparts. Sadly, women who reach traditionally higher paid positions routinely fail to enjoy this 25% benefit. Female chief executives and senior officials earn on average 28.7% less than do men in similar positions. Worse still is that women hold only 30% of these jobs; part of the effort to empower women in the workplace is to reduce the gender pay gap of 18% overall which still exists, half a century after the baby boom.
Jeremy Corbyn yesterday was setting out plans to “kerb boardroom pay” perhaps this is another way that the Government can help reduce the gender pay gap. I appreciate that Jeremy Corbyn was aiming these policies at the entire workforce (and were not gender specific), but they do bring into context the fact that pay ratios be between higher and lower earners in a company also exist, not just hierarchically but by gender too. Economists called this policy “lunacy”, and the reality is that if brought into force, it still wouldn’t reduce the gender pay gap for those in lesser paid roles either. The key for all businesses should be the creation of a high-value economy with skilled workers with no gender pay gaps apparent.
One caveat is that more women than men work part time, which can skew the results to a certain degree. All the same, the existence of the gender pay gap is undeniable, as is the under-representation of women in senior positions. Gender discrimination is still all too prevalent in the workplace and as important as this new legislation is, it’s only one step towards true equality. The new Gender Pay Gap Reporting guidelines hope to reduce this disparity even further and will provide a transparent reporting process that should encourage all businesses with 250 employees or more to give further consideration to whether or not they are discriminating based on Gender. Results will be made public and in today’s world of Social Commentary; businesses will surely want to show that they are leading the way regarding equal pay or they risk public scrutiny.
The following is a Gender Pay Gap Reporting Timeline to help you to keep your business compliant:
1. January 2017: Collect data for the first reporting period. The information collected may include payments as far back as 5 April 2016.
2. February/March 2017: Conduct gender earnings analysis tests to ensure that your business is compliant with the new requirements.
3. April 2017: The results of your gender pay gap studies must be published online if your business consists of 250 or more employees.
4. April 2018: Publish the analysis results on both your corporate website and then the relevant Government reporting website.
Positively, more women are working now than at any time in our history, and this is itself an encouraging trend, but we still have work to do. We need to continue to empower women and eliminate the pay gap if we want to keep the British economy growing and British industry healthy, despite uncertainties in the current political climate. Let’s hope the new Gender Pay reporting legislation takes us one step closer…
• So, what do you think about the current Gender pay gap?
• Do you think Gender Pay Gap Reporting will make a difference?
This article was written by Nick Day, Managing Director of JGA Recruitment – the leading Payroll, HR & Reward Recruitment Specialists.
If you are looking for expert talent in the fields of Payroll, HR or Reward, then please reach out for a 15 minute ignition call and I would be delighted to discuss how we can help.
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