For many years it has been a problem for employees and equality and inclusion groups that women, on average, still get paid less than their male counterparts for the same job role. In recent months, we have begun to see a change in the way that the government are viewing this problem and we are starting to witness the beginning of a new era in earnings, with the requirement for all businesses to publish their gender pay gaps planted firmly on the horizon.
New measures, which could mean that it will be compulsory for businesses to publish the differences between their average pay for their male and female employees, have recently been included as one of the amendments to the Small Business Bill which has just been debated in parliament. It has also been stated that any company or business who chooses to not comply with the new legislation will be fined up to a total of £5,000.
This proviso had originally been put forward by Labour and was quickly secured by the Lib Dems who have said that they have been fighting for obligatory pay transparency since the formation of the coalition government, only to be opposed by the Conservatives. Nick Clegg has been quoted as saying that he cannot understand that “in the 21st century, women on average still receive a smaller pay packet than men.”
In 2011 the government did take the first steps in this process by launching the Think, Act, Report scheme. This gave all employers the opportunity to voluntarily offer up information about the pay gap between their male and female workers. Although over 250 businesses, including some large companies, did sign up for the scheme, it was only a very small number of them that actually ended up making any of their data public. Therefore proving that giving businesses the ability to voluntarily offer up this information was not going to be the way forward.
Today, there are only 5 of those initial 270 companies currently reporting their pay gap – by no means enough to have any impact. It is clear that a voluntary process is insufficient to get the information required. However, some also believe that the new legislation will not offer enough of an incentive for businesses to take part. Denise Keating, the Chief Exec of ENEI (the Employers Network for Equality and Inclusion) has stated that although she feels the new legislation is an improvement, she wonders whether the £5,000 fine will be enough to make all businesses cooperate.
If this new legislation is accepted by the government it will mean a change in the way that all pay is reported. It will make it compulsory for all businesses to publish not only the average pay for men and women, but also the difference between their starting salary and the total average earnings to be broken down in to job type, grade and inclusive of bonuses and rewards.