Can Gender Pay Reporting Finally Close the Pay Gap?

Wednesday the 8th March marked International Women’s Day, which helps to promote the formation of an equal and gender inclusive working world. I was reminded of my ‘Equal Pay Day: How far have we come?’ blog in November 2016 about the historical fight for pay equality between men and women. Of course, the introduction of Gender Pay Gap Reporting in 2017 will be quite a significant legislative change and these regulations will come into force on the 31st of March 2017 for public sector employers, and the 7th of April 2017 for private and voluntary sector employers.

Gender Pay Gap Reporting

Under the legislation, employers with 250 or more employees will be required to publish statutory calculations that show how large the pay gap is between their male and female employees. These calculations will relate to employee basic and bonus pay in addition to information surrounding the number of men and women in each pay grade of the organisation’s pay structure. Moreover, organisations are permitted to provide a narrative with their calculations which could provide an explanation for potentially skewed results, in addition to any actions that the organisation is taking, or intends to take, in order to eliminate any pay gaps that exist.

Interestingly, these results must be published on the company’s own website as well as the government’s website, which means that any pay inequalities will be visible to business partners, competitors, customers, employees, and potential future recruits. This will presumably force employers to be more active when trying to eliminate the gender pay gap in their organisation.

Iceland leading the way

On the same day, the Icelandic Government announced that it would introduce legislation that would require all employers with 25 or more staff to prove that they offer equal pay regardless of gender, ethnicity, sexuality, or nationality, which they hope will come into force by 2020. According to the 2016 Global Gender Gap report by the World Economic Forum, Iceland are the number 1 country when it comes to Equal Pay and this seems to be yet another statement of intent. Despite Iceland leading the way, , there is still the existence of an 11% gender pay gap so one would hope that these measures will eliminate the gap.

Final Thoughts

The same report indicated that the UK was the 18th ranked country when it comes to Equal Pay – for every £100 a man earns, a woman will earn £83. When you consider this £17 gap, it will be interesting to see what effect Gender Pay Gap Reporting can have in eliminating the significant pay gap that currently exists in this country.

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