The Prime Minister has announced plans to exempt tens of thousands of employers from reporting obligations such as gender pay gap reporting as part of a “sweeping package of reforms to cut red tape”.
Small and medium-sized businesses with fewer than 250 employees are currently exempt from regulatory requirements such as gender pay gap and executive pay ratio reporting, while those with fewer than 50 staff are often completely exempt.
The government will expand this threshold to 500 employees, and from today (3 October) all new regulations under development will take this into account. It added that it would also be able to apply this to retained EU law as part of its plans to reform regulations it considers to be “bureaucratic and burdensome on businesses”.
It has even mooted extending the threshold to businesses with 1,000 employees in the future, “once the impact on the current extension is known”.
The government estimates that many businesses with between 50 and 249 employees spend more than 22 staff days per month dealing with regulation, quoting a survey it ran in 2020 claiming more than half of all businesses consider regulation to be a burden.
Speaking at a fringe event at the Conservative party conference in Birmingham yesterday, treasury minister Chris Philp suggested the government could go further than extending reporting exemptions.
He told the event: “[Business secretary] Jacob Rees-Mogg has a whole load of ideas to do with that – one of which is making sure no business under 500 employees gets subject to business regulation.”
While the government claims any exemptions will be “applied in a proportionate way to ensure workers’ rights and other standards will be protected”, unions are angry about the plans.
The TUC said no longer requiring businesses with fewer than 500 employees to report their gender pay gap would “turn the clock back for women at work”.
General secretary Frances O’Grady said the changes represented “real threats to workers”.
“Obligations on businesses which were put in place to help improve the lives of working people, like reporting on gender pay gaps and executive pay ratios, are set to disappear overnight for employers with less than 500 workers,” she said.
“Scrapping gender pay gap reporting for businesses up and down the country risks turning the clock back for women at work. And ditching reporting on pay ratios for these businesses will be a boon to greedy bosses.
“Yet again we are seeing reckless and cynical deregulation being pushed through with no consultation and no real thought for the impacts on working people.”
She added that regulation was not holding employers back, rather “botched Tory economics” leading to low pay, depressed demand and uncertainty.
Steve Herbert, wellbeing and benefits director at &Partners, said that while removing regulation does lower costs for businesses, this must be balanced with increased risk.
“Poor governance, which removing reporting requirements encourages, discourages confidence, investors and (importantly) customers too,” he said.
A spokesperson for the Equality Hub, which focuses on government policies in diversity and inclusion, said nothing had changed from a legal perspective as of yet: “The law has not changed. The threshold for employers reporting gender pay gap data remains at 250 or more employees.”