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12 February 2016

New plans state UK companies must reveal gender pay gap

From 2018, organisations with over 250 people will have to reveal their gender pay gap.

Bonuses, which are suspected to be a big factor of gender pay inequality, will also be included in the listings. Estimates from the Office for National Statistics suggests the pay gap currently stands at 19.2% for full- and part-time UK workers. This means that, on average, a woman will take home around 80p for every £1 earned by her male counterparts.

Nicky Morgan – MP for Loughborough, Secretary of State for Education and Minister for Women and Equalities – said: “In recent years, we’ve seen the best employers make ground-breaking strides in tackling gender inequality. But the job won’t be complete until we see the talents of women and men recognised equally and fairly in every workplace.

“That’s why I am announcing a raft of measures to support women in their careers, from the classroom to the Boardroom, leaving nowhere for gender inequality to hide. At the same time, I’m calling on women across Britain to use their position as employees and consumers to demand more from businesses, ensuring their talents are given the recognition and reward they deserve.”

PwC is a company that already voluntarily reports its gender pay gap publicly. Gaenor Bagley, Head of People and Executive Board Member at PwC, explains the benefits of this: “Publishing our gender pay gap has been a really positive move. It has increased awareness across our firm of the underlying issues and allowed us to take action as part of our wider diversity and inclusion initiatives.”

However, she says that making this information public knowledge is about bringing the issue into the spotlight, not “naming and shaming.” She says: “This is about companies learning from each other on best practice on how to create equal opportunities for all across the workplace. Irrespective of whether businesses like this approach, the Women on Boards review shows that reporting drives change.

“Importantly, any gender pay or bonus numbers need to be supported by commentary. The size of the gap itself isn’t the most important factor – it is whether organisations understand the drivers of the gap and say what they are doing to close it. A key driver will be female representation at senior versus junior levels.”

However, TUC General Secretary, Frances O’Grady, says 2018 is too long to wait: “There is no need for such a long delay. And it is a real shame that bosses won’t be made to explain why pay gaps exist in their workplaces and what action they will take to narrow them.”

Beverley Sunderland, Managing Director at Crossland Employment Solicitors, said that much was left unclear by the announcement: “There are still a number of question marks following the release of the Government’s Gender Pay Gap Report which need to be answered. For example, will this actually apply to public sector employees? The Government has said it intends it to apply to larger public sector employers but this would require a change in the law as they are currently specifically excluded. What is the definition of ‘employees’ going to be, and will employers ensure their numbers are below 250 at the relevant 12 month reporting point?

“Also, without any real penalties for employers who refuse to publish their details other than perhaps ‘naming and shaming’, will the regulations have any real teeth?  While I believe the decision to have separate bonus reporting is a good one, not reporting full and part-time employees separately also risks hiding the average between men and women, given the often different working patterns in many working families.”

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