Today is International Women’s Day. What originally started life in 1909 as a single protest organised by the Socialist Party of America in New York, is now a global event with the backing of the United Nations and some of the world’s largest corporations.
The theme of this year’s campaign is #BeBoldForChange. The UK Government’s own flagship equality measure, while a welcome step forward, is, it might be said, neither particularly bold, nor likely to inspire much change.
In just under a month, from 6 April, new regulations on the publication of gender pay gap information will come into force.
Under the new rules, employers with 250 employees or more will be required to publish certain metrics on pay and bonuses for male and female employees on an annual basis. More specifically, employers must publish information on:
- The mean and median hourly rates of male and female employees
- The mean and median bonus pay paid to male and female employees
- The proportions of male and female employees that are paid bonus pay
- The proportions of male and female employees that fall within four quartile bands
It is worth clarifying from the outset that any data showing a gap between the earnings of male and female staff is not necessarily the same as an unlawful inequality of pay under the Equality Act 2010. The UK Government hopes that by increasing transparency around gender pay differences, organisations will be encouraged to take remedial action.
Data which appears to show a large gap in pay between men and women clearly has the potential to be both commercially and legally damaging for employers. The reputational damage and negative publicity of a gender pay gap could be considerable and could also open the door to equal pay claims.
The real hope is, of course, that this data will draw attention to the worst offending firms by shining a light on the average pay gap across these organisations. Pay parity is, after all, something that we should all be aspiring to, and this is a step in the right direction. However, as is so often the case, some have queried whether the reporting obligation goes far enough.
Sheila Wild, the former Head of Age and Earnings Inequality at the Equality and Human Rights Commission, points out that, “although median and hourly pay … provide useful comparisons of men’s and women’s earnings, they do not reveal differences in rates of pay for comparable jobs.” There is a body of evidence to suggest that women are paid less than men, even those in similar positions. A study in 2015, for example, found that female managers earn 22% less than their male counterparts. The new reporting requirement arguably does not do enough to address this.
At the same time, there are questions over whether the reporting obligation itself will do anything to tackle the underlying root cause of the problem, i.e. that there are fewer women in senior positions in comparison to men. Last year, research showed that women made up just 16% of executives across the FTSE350. This is a statistic that businesses are working to improve. Whether the increased levels of transparency will provide further impetus to address this remains to be seen, however forward thinking businesses could use the data as a catalyst to embed real, lasting, positive change within their organisations.