Pay audit requirements to be restricted to firms with more than 500 employees

The government has been accused of watering down the Equality Bill after it emerged that only companies with more than 500 employees will be required to carry out equal pay audits, leaving 97% of firms exempt from new equality legislation.

Yesterday it was revealed that the Government Equalities Office (GEO) plans to amend the clause in the Bill which currently requires firms with more than 250 employees need to report on equal pay from 2013 if not enough progress has been made voluntarily before then, the Sunday Times reported.

Business groups will be relieved that the government has taken a step back on equal pay audits, as they were concerned that they would be costly and complicated to carry out.

Stephen Alambritis, head of public affairs at the Federation of Small Businesses, told the newspaper: “This decision reflects the fact that the worst pay gaps between men and women are in the big banks and City law firms. The vast majority of firms will be excluded from the measures.”

The changes are being made in an attempt to push the Bill through the parliamentary process before the general election.

The Equality and Human Rights Commission (EHRC) said it was “impractical” to expect medium-sized companies of 250-500 staff to produce as much data as the biggest firms.

A spokeswoman for equality minister Harriet Harman said: “We will look to the opposition not to block measures to tackle inequalities.” The GEO said that it would wait for the EHRC’s final report in January before making any final decisions.

The Equality Bill, currently being read in the House of Lords, was introduced to help eradicate the equal pay gap, which currently stands at a median 12.1% for full-time roles.

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