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Commons Committee recommends tougher gender pay gap laws

September 5, 2018
Employment Law

You will probably be aware that new laws came into force in April 2017, requiring businesses with 250 or more employees to publish data on their gender pay gap. All affected employers should have published their initial reports earlier this year.  But has the current regime gone far enough?  A House of Commons committee doesn’t think so.

Why is there still a problem?

The House of Commons' Business, Energy andIndustrial Strategy Committee has recently published its thoughts on the current reporting regime.  It highlighted the following concerns:

·       We have one of the highest gender pay gaps in Europe;

·       The average pay gap across the economy as a whole is 18% in favour of men;

·       78% of organisations have reported gender pay gaps in favour of men; and

·       Gender pay gaps of over40% are not uncommon in some sectors.

No doubt, the hope is that because they are now obliged to publish their gender pay gap, businesses will more proactively seek to reduce it.  However, given that the current reporting regime only applies to larger businesses, the Committee suspects that half the UK workforce are not represented by these reports.  What’s more they suspect that the pay gap within smaller businesses may be even greater, such that the true extent of the problem is being masked.

So what is the Committee suggesting?

The committee is encouraging the government to be more ambitious and go further in its efforts to identify and address the underpayment of women.  With this in mind, it is recommending (amongst other things) the following steps:

1.    That the requirement to publish gender pay gap data is extended to all businesses with more than 50 employees;

2.    That employers should be obliged to provide a written explanation for their gender pay gap, together with an action plan for how they intend to address it;

3.    That partnerships should include partner remuneration in their figures;

4.    That businesses should provide even more information about the pay disparity at different levels within their organisation; and

5.    That the Equality and Human Rights Commission should have clearer powers to take enforcement action against businesses who fail to comply with their obligations.

These recommendations are by no means necessarily going to be taken up and implemented by the Government.  After all, as we have noted in the past parliamentary time is currently dominated by a little thing called‘Brexit’.  However, smaller businesses who are currently not caught by the reporting regime may nevertheless want to consider their position.  Do you want to conduct an audit of your gender pay gap, before you are potentially required to make it public?  Would this give you time to address any problems and ensure that you are cast in the best possible light?  There are pros and cons to this approach.  If you want to discuss the issue in more detail, please get in touch

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