April 2015
Businesses with more than 250 employees will be expected to reveal pay differences between their male and female employees, thanks to new legislation recently introduced in Parliament in the Equal Pay Transparency Bill 2015.
Although Section 78 of the 2010 Equality Act already provides the means for the government to introduce regulation around revealing gender pay differences, it has never been made into law. However, a Think Act Report scheme was introduced in 2011 which provided a voluntary gender equality reporting framework instead.
According to Employee Benefits magazine, just five large employers including Friends Life and PricewaterhouseCoopers (PWC) follow this reporting framework, but once the Equal Pay Transparency Bill 2015 has been introduced, UK businesses will need to be much more transparent with pay information.
But Martha How, Reward Partner at Aon Employee Benefits said of the legislation:
“The current Bill is the most recent in a long line of equality legislation since 1970. It is very positive that the UK government continues to legislate in this area to attack pay inequality. There are very few, if not no UK employers who explicitly discriminate against one gender but many employers are working with outdated and historic pay structures which inadvertently lead to inequality. This Bill should focus the minds of these employers to review their pay policies and structures.”
How continued “There may be good reasons for there being better pay in one gender group over another: some jobs might be more demanding and others might require more skills and knowledge,” she said. “So simple reporting of single figures may not be particularly meaningful.”
Commenting on the proposed amendment to the bill, Kathryn Nawrockyi, opportunity now director at Business in the Community described gender pay gap reporting as hugely beneficial, not just to help identify and address pay gaps, but to tackle men and women’s ‘different perceptions of pay within their organisations’.
Business in the Community’s own benchmarking research found that 1 in 5 employers have never conducted an equal pay audit and Nawrockyi urged employers to monitor pay and reward structures at all levels and publish the results in the public domain.
“By taking this decisive action, employers will send out a strong message that they are serious about workplace gender equality and that they reward all their employees’ efforts fairly,” she added.
Summing up, How said: “The Equal Pay Transparency Bill is in its early stages in Parliament and we are sure we will hear much more on this subject moving forward. Once there are more detailed proposals we will be able to assess the impact on employers.”
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