The proposals on gender pay reporting by the Equality and Human Rights Commission (EHRC) received a decidedly mixed welcome from some HR directors and employers’ groups.
The commission’s promise of two-year immunity from investigation for those firms that go public with their pay gaps, designed to make the tough medicine a little sweeter, is also likely to make little difference. The CBI has already said the proposals risk backfiring and has withdrawn its support for them.
The new regulations will undoubtedly be felt hardest by firms in the financial services sector, where the watchdog’s own figures have shown women in some organisations receiving up to 80% less in performance-related pay than their male colleagues. But, as one employment lawyer warned last week, transparency on pay is an admirable concept, but elusive to achieve in practice.
Publishing pay statistics might indeed grant employers immunity from investigation, but that data will be poured over by employees, job applicants, as well as competitors – and may lead to some particularly negative publicity. Legal experts have even raised the possibility of female staff being targeted by no win, no fee lawyers looking to encourage them to bring equal pay and/or sex discrimination claims.
Underpinning this is the reserve power contained in the Equality Bill which could lead to mandatory reporting of pay gaps by 2013. So it seems the case that when weighing up the risks of volunteering this information, many employers will feel damned if they do and damned if they don’t.