New rules requiring employers to report information on the gender pay gap within their organisation came into force on Saturday, in the latest attempt by a UK government to bring women workers’ salaries up to the level enjoyed by men. Like previous initiatives, it already looks doomed to fail.
Although we have yet to see the final regulations, a draft circulating since February appears toothless and, more importantly, does little in addressing the underlying issues why British women still earn less than men on average.
Among the more obvious holes in the regulations is that fact that they will apply only to companies with more than 250 employees. Since more than 99 per cent of UK employers are small businesses with fewer than 50 employees, the majority of firms won't be required to report at all.
What’s more, there are no sanctions for reporting incorrect information – or not reporting at all. Instead, there has been much discussion about “naming and shaming” those employers who do not comply. Whether this will be introduced is yet to be seen, but even if it is, the way naming of employers who didn’t pay the national minimum wage has been handled makes one sceptical about the extent and effectiveness of this measure.
Of course, concerns over potential damage to reputations are real, especially for well-known companies, and stronger sanctions for non-compliance could easily be introduced. However, it is difficult not to conclude that this will be seen as no more than a box ticking exercise: given the burden of additional administration, which many employers don’t have the resources to meet, many are likely to file minimal reports that offer little real insight.
On the other hand, many employers are already well aware of the issues preventing women from climbing the corporate ladder. Concerned at the lost potential this represents, these companies have already been turning their minds to how to address inequality. A number of large employers have signed up to the Women in Finance charter, which goes much further than the Government’s new regulations in seeking to address the underlying issues of inequality in senior positions.
More fundamentally, though, attempts to tackle the gender pay gap at company level miss the point: we have had the Equal Pay Act for more than 40 years, so why do women still earn less than men? The issue is far more structural than limited to the individual decisions of employers.
There are still instances of women being paid less than men in the same roles. There has also been much focus on the lack of women in senior roles, and a report last year bore that out when it found that men were promoted at a rate 40 per cent higher than women, regardless of similar experience or workload.
While these issues are certainly skewing the pay averages in men’s favour, an even bigger issue is occupational segregation. In Scotland, research suggests women are more likely to be concentrated in certain industries such as public administration, education and health. Interesting research from the US suggests wage gains in the last 20 years have gone disproportionately to those who work longer hours. Although men make up a bit more than half of the full-time workforce, they represent 70 per cent of those working 50 hours or more a week.
All these structural issues must be addressed to bring us anywhere near true equality, but it is difficult to determine how employers can do this individually. We could start by looking at how we structure the workplace: a focus on outputs rather than hours worked seems logical.
But the issue of childcare underlies all these issues. While shared parental leave provisions were a welcome introduction to the discussion, men will only start to take paternity leave seriously when they do not feel it will hamper their career progression, and they are paid for it. Unfortunately, in the current times of austerity it is unlikely that such radical steps will be taken.
Amanda Jones is head of employment and pensions at Maclay Murray & Spens LLP