Good news: big UK companies with 250 or more employees will be forced to publish their gender pay gaps within the next year.
But before we go any further as there has been some confusion on social media, it’s important to clarify what the gender pay gap actually is. Because contrary to a disturbingly high number of people on my Twitter feed, it does exist.
What is the gender pay gap?
To be clear: a company’s gender pay gap is the total difference between the average full-time equivalent earnings of male and female employees, as a percentage of the male employees’ earnings.
It is not the difference between what men and women are paid for doing the same job. That has been illegal for 45 years under equal pay legislation.
How will the new law impact employers?
Time to continue onto the latest positive development. The new legal requirement was announced by Women and Equalities minister Justine Greening today in a bid to shine a light on gender inequality and tackle workplace discrimination. The regulations will impact around 9,000 firms and more than 15 million employees, representing nearly half of the UK’s total workforce.
— Women and Equalities (@WomenEqualities) April 6, 2017
Employers must publish their first figures before April 2018 according to rules enforced by the Equality and Human Rights Commission. Data about their pay gap and gender bonus gap must be provided, as well as a breakdown of the number of men and women who receive bonuses. The proportion of male and female employees in each pay band must also be reported to help prevent women being held back from senior roles.
Will the new law actually do anything?
Employment experts believe that the gender pay gap reporting law will do more to improve pay parity in the next five years than equal pay legislation has done in that aforementioned 45. Furthermore, the government hopes that £150 billion will be added to our annual GDP by 2025 as a result of companies taking fresh measures to eliminate gender pay gaps in order to avoid tarnishing their reputations.
“Helping women to reach their full potential isn’t only the right thing to do, it makes good economic sense and is good for British business,” said Greening. “I am proud that the UK is championing gender equality and now those employers that are leading the way will clearly stand out with these requirements.”
What is the UK’s current gender pay gap?
The gender pay gap reached a record low this year, with women earning 9.4% less than men, down from 17.4% from 1997. However, there has been barely any progress since 2012, when women took home 9.5% less salary than men, proving that there is a long way to go.
Steps in the right direction are finally being taken, and that’s certainly something to celebrate. Just make sure you know what it means.