From 5 April, businesses with more than 250 employees have a year to publish their gender pay gap. It’s hoped that a public airing of pay disparity will spur the UK’s larger employers into action.
This news has been welcomed by a spectrum of stakeholders in the public and the private sectors. Reporting won’t just catch typical employees on standard employment contracts, those engaged in non-traditional employment arrangements – including some independent contractors and those on zero hour contracts – will be included.
Employers should view the new rules as an opportunity for positive change
However, there are significant gaps in the new regulations. Many working in professional services businesses in Scotland at a senior level – where the gap is most stark – will be left out of any reporting obligations.
Businesses with a limited liability partnership (LLP) structure, or traditional partnerships that are commonly used for accountants, architects, lawyers, are not required to include “partners” or LLP members in their calculations. This means that any figures produced will be skewed and fail to show the extent of the pay gap across some significant business sectors.
To take the legal profession as an example, the latest figures from Law Society of Scotland found that if you compare women and men in terms of years of qualification, or age, the gender pay gap is sizeable – 42 per cent at its widest. Accountancy partnerships fare little better.
Consultancy giant Deloitte recently published its gender pay gap, at 16.8 per cent, with only 18 per cent of its partners being women.
Employers of every size should be viewing the new requirements as an opportunity to make positive changes, rather than as an operational headache. A large gender pay gap could represent a significant reputational risk and have implications on a firm’s talent acquisition strategies. Female talent may be influenced by reported gender pay gap figures when making career choices – especially if those of a particular employer compare poorly with others within that sector.
It’s up to employers to recognise the value gender parity affords their businesses. The legislative response is unlikely to be enough on its own. Regulators and other bodies have an important contribution to make.
• Elaine McIlroy is a partner specialising in employment law at Weightmans (Scotland) LLP