The government now sees equal pay as a vote winner. The requirement for large companies (250+ staff) to publish their gender pay gap figures is not new. It was first proposed, but not implemented, by the Labour government under the Equality Act 2010 and rejected by the Tories during the coalition government, preferring a voluntary approach. This resulted in minimal responses. However, the majority of UK employers are small to medium sized companies, so the impact of these regulations will be limited.
Publication of gender pay gap information for large companies is now required by April 2018. There are no financial penalties for failing to comply and any enforcement action by the ECHR is likely to be minimal. It is the ‘naming and shaming’ from government websites or league tables which will be most damaging for a company if their figures do not look good.
Some companies may well have valid reasons for gender pay differences. Whilst explanations can be provided with the published information, these may not be sufficient to counter the reputational damage caused by negative publicity.
The government hopes that having given companies 12 months to prepare for publication, that will allow them sufficient time to address any gender pay disparity and implement change. It is already starting to take effect.
However, if the government is serious about promoting gender pay equality, it should consider reinstating equal pay questionnaires which were abolished during the coalition government. Without a statutory process, it is far harder for women (and men) to establish if their co-workers are being paid more than them for the same work. Gender pay differences will not be resolved simply by ‘naming and shaming’ large companies.
Thousands of employers will begin to record their gender pay gap figures for the first time and will have to publish their first figures before April next year.
The rules which will be enforced by the Equality and Human Rights Commission require companies who employ more than 250 people to provide data about their pay gap, the proportion of male and female employees in different pay bands, their gender bonus gap, and a breakdown of how many women and men get a bonus. The legislation will affect around 9,000 companies, who collectively employing more than 15 million people.