Businesses forced to reveal gender pay gap

New plans announced today by the Government mean businesses will be forced to address differences in gender pay gap or face being named and shamed.

The new measures will apply to business with 250 or more staff members, meaning about 8,000 firms in the UK will be required to meet the regulations.

Businesses will need to start calculating the pay gap from April 2017 – 12 months ahead of the first tables being published.

Nicky Morgan, Education Secretary.
Women and Equalities Minister Nicky Morgan.

Women and Equalities Minister Nicky Morgan said companies would be required to reveal the number of men and women in each pay range to show where pay gaps are at their widest.

Employers must also publish their gender pay gap on their websites.

Morgan commented: “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.”

However, EEF said the new measures, while carried out with the best intentions, will only “confuse more than clarify”.

Tim Thomas, head of employment and skills at EEF, the manufacturers’ organisation
Tim Thomas, head of employment & skills, EEF

Commenting on the announcement, Tim Thomas, head of employment and skills policy at EEF said: “Publishing a company’s gender pay gap should be easy, transparent, and simple to report – allowing a clear comparison between different businesses. It seems doubtful that the model announced today will achieve this.

“Manufacturers support greater pay transparency, including gender pay reporting, but will see today’s announcement as one that will confuse more than clarify. The aim of gender pay reporting should be to shine a spotlight on an overall figure, leading employers to take action where needed.

“However, the addition of a multitude of metrics to be reported on, both mean and median calculations, bonuses and earnings distributions, adds nothing but a distraction. Observers will be forgiven for missing the point amongst  the mass of data employers will now be required to publish.”

Crop - Carolyn Fairbairn, Director General, CBI
Carolyn Fairbairn, director general, CBI.

Carolyn Fairbairn, the director-general of the CBI, said the changes must not be used to target firms.

“League tables should not be used to name and shame firms, as data will only be able to present a partial picture, particularly given factors such as the mix of part-time and full working and sectoral differences,” she said.

“Where reporting can be useful is as a prompt for companies to ask the right questions about how they can eradicate the gender pay gap.”