U.K.: Government Proposes Mandatory Reporting of Gender Pay Gap

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By Ali Qassim

July 15—Businesses in the U.K. with more than 250 employees will have to publish the difference between the average pay of their male and female employees under proposals announced July 14 by Prime Minister David Cameron. The measure, which the government expects to introduce in the first half of 2016, “will cast sunlight on the discrepancies and create the pressure we need for change, driving women’s wages up,” Cameron said.

Women currently earn on average about 80 pence ($1.24) for every pound ($1.55) earned by a man, according to the Department for Business, Innovation and Skills.

The government will seek public comment until Sept. 6, 2015, on how the new gender pay gap regulations will be designed, including what, where and when information will be published, BIS said. The consultation will also explore how quickly the proposed regulations, which will implement Section 78 of the Equality Act 2010, can be enforced.

Strong Intervention or Voluntary Change?

“Without strong intervention, as highlighted by a recent World Economic Forum study, it would take 80 years to achieve global gender pay parity,” according to Steve Varley, Ernst & Young LLP U.K. chairman and managing partner for U.K. and Ireland. Varley added that “all of us in business find this an unacceptable amount of time to wait.”

Deputy Director-General of the Confederation of British Industry Katja Hall pointed out, however, that the “voluntary approach” used to raise the number of women board members “demonstrates the value of encouragement as opposed to using the law.” (BIS announced July 14 that women now represent a quarter of board members of the UK’s FTSE 100 companies—a target set by the government in 2011.)

Hall added that although the CBI, which represents a third of the U.K.’s private workforce, believes that “publishing pay gap data could be misleading, we will work with the government to ensure that rules on what is published are flexible enough to be relevant to each company.”

Frances O’Grady, general secretary of the Trade Union Congress, which is comprised of 51 affiliated unions representing nearly 6 million working people, said that “publishing information on gender pay gaps is a good start” but underlined that “it is just that—a start. Employers need to look at why those differences still exist and why women are being held back or getting stuck in low-paid, part-time work.”

To contact the reporter on this story: Ali Qassim in London at correspondents@bna.com

To contact the editor responsible for this story: Rick Vollmar at rvollmar@bna.com

The U.K. government’s Closing the Gender Pay Gap consultation is available at https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/444716/Gender_Pay_Gap_Consultation.pdf.

For more information on British HR law and regulation, see the U.K. primer.