In February 2016, the then Secretary of State for Education and Minister for Women and Equalities announced the Government Equalities Office's plan to introduce mandatory gender pay gap reporting for employers with 250 or more employees working in Britain in the private and voluntary sectors. The final regulations are anticipated very soon.
It is planned that the first pay gap reporting will take place annually from April 2017. We explained the proposals in more detail in February here. The intention is that the final regulations, which are expected to be published in October 2016, will rely on public and reputational forces to encourage employers to minimise the gender pay gap. Employers who do not meet their obligations to publish will be publicly identified, and those who do publish, but whose gender pay data shows a significant discrepancy, will risk reputational damage.
The UK gender pay gap is 23%, much reduced in the last 10 years. In Scotland it is a shocking 29%. In the EU the average is 16.3%.
There are many reasons for the pay gap, including women working part time, or taking time out of work to care for children or other dependents. This can make it harder for them to return to exactly the same work as they left. This affects career participation and progression as well as pay. Women are also underrepresented in many industrial sectors, meaning that business and our economy is not realising the potential of its economic resources.
Prior to publishing to proposed regulations, the UK Government published its response to the Consultation on Closing the Gender Pay Gap which identified the underrepresentation, promotion and payment of women in the UK economy and suggested ways to try to overcome that. The Government also said it would seek to encourage employers to try to attract talented women into challenging and rewarding careers.
The UK Government is currently consulting on introducing mandatory gender pay gap reporting for large public sector employees. In Scotland, as part of the Scottish Government's Equality Outcomes to improve the position of women in the Scottish economy, under the public sector equality duties, public authorities with over 150 employees have a duty to publish information about the percentage difference between men's and women's average hourly pay excluding overtime.
Last week, the UK Government's Women and Equalities Committee said urgent action was needed to protect pregnant women and new mothers from discrimination at work and to better protect agency workers too.
Are we entering a new era of transparency in inequality? The anticipated regulations may well increase the possibly of equal pay and discrimination claims where employees feel there is gender bias in the way they are treated.
Recently, we again saw the public "naming and shaming" of employers who didn't pay national minimum or living wage. That scheme relies on HMRC identifying non-compliance before publication, and there are civil and criminal penalties for non-compliance. While the planned gender pay reporting requirements will be compulsory, and publication will be necessary from the start, many would say that the lack of any penalty for failure to meet the reporting obligations, and disproportionate cost of an employee making an employment tribunal claim, mean that many employers will not take the obligations seriously. The UK Government has promised to keep the position under review.
We'll be reporting when the final regulations are published in the coming weeks, and we will be discussing them in our autumn seminars in November so will keep this on the "agender" until then...
Disclaimer
The material contained in this article is of the nature of general comment only and does not give advice on any particular matter. Recipients should not act on the basis of the information in this e-update without taking appropriate professional advice upon their own particular circumstances.
