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Gender pay gapEquality, diversity and inclusionPay & benefits

Gender pay gap reporting to be required by 2016

by Jo Faragher 9 Mar 2015
by Jo Faragher 9 Mar 2015 Nick Clegg says the government will vote through mandatory pay gap reporting this week. Photo: REX
Nick Clegg says the government will vote through mandatory pay gap reporting this week. Photo: REX

The Liberal Democrat party has succeeded in pushing through an amendment to the Small Business Bill which will require larger organisations to report on the difference in pay between men and women.

The Bill is due to be debated in the House of Lords this week, and – if the amendment is secured – this will mean that mandatory gender pay gap reporting could become a reality for employers within the next 12 months.

The amendment relates to Section 78 of the Equality Act 2010, which means government can require companies to publish information about the difference in average pay between male and female employees, but this clause has never been implemented.

Gender pay gap reporting

Good practice manual: Equal pay – Reporting on gender pay gaps

Equal pay: 2013 XpertHR survey

Good practice manual: Gender – The gender pay gap

Despite unions and lobbying groups pushing for mandatory gender pay gap reporting, it was agreed to keep Section 78 under review and encourage employers to report voluntarily.

The new proposal by the Liberal Democrats would require the Government to implement this provision, placing a duty on the relevant Secretary of State to make the necessary regulations within 12 months of the enactment of the Small Business, Enterprise and Employment Bill.

In 2011, a voluntary reporting scheme was introduced called Think, Act, Report, but despite high-profile employers such as HSBC, Tesco and Vodafone signing up, only five companies have published details of their gender pay gap so far.

The new measures will apply to companies that employ more than 250 people. While this accounts for just 0.13% of businesses, these organisations employ more than 10 million people across the UK. The Regulations will also be able to specify a fine for non-compliance, proposed to be up to £5,000.

In terms of detail, employers will be expected to publish the difference between male and female starting salaries, the difference between average basic pay and total average earnings of men and women broken down by grade and job type, as well as other components such as bonuses.

Deputy Prime Minister Nick Clegg announced the proposed amendments to coincide with International Women’s Day. He said: “We can’t wait and we can’t dither. We need to sort this out now.

“Both Jo Swinson and I have pushed for this to happen within government for a long time. Finally, we are now in a position for the Government to vote through our party’s manifesto commitment for large companies to publish the difference in average pay between male and female employees.”

Swinson, minister for employment relations and equalities, added: “This is a victory for all women in the UK, and in particular for everyone who has been making the case for pay transparency and helping to put pressure on the Conservatives.”

Denise Keating, chief executive at the Employers Network for Equality & Inclusion (enei), welcomed the introduction of mandatory gender pay gap reporting. She said: “The Government’s Think, Act, Report initiative launched in 2011 gave employers the opportunity to voluntarily report on their gender pay gap, but with only five companies reporting, four years on, it is clear that the voluntary approach was insufficient. The new legislation has teeth, but a maximum fine of £5,000 may yet be seen as too little to enforce compulsory reporting.”

Jo Faragher
Jo Faragher

Jo Faragher has been an employment and business journalist for 20 years. She regularly contributes to Personnel Today and writes features for a number of national business and membership magazines. She won the Willis Towers Watson HR journalist of the year award in 2015 and has been highly commended twice.

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1 comment

Avatar
Darren Newman 9 Mar 2015 - 3:12 pm

So five years after coming into Government the Liberal Democrats have succeeded in persuading their partners to implement the provision passed by the last Labour Government. And they’ve done this by getting them to agree to an amendment to the Small Business Bill proposed by Labour’s Glenys Thornton in the House of Lords, which mirrors a private members bill proposed by Labour MP Sarah Champion. I think it’s going a bit far to call this a Liberal Democrat achievement.

If its not indelicate, can we also remember that the LDs did nothing to prevent Equal Pay questionnaires from being abolished. Pay transparency clearly isn’t that crucial to them.

Comments are closed.

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