A research report by the Fawcett Society and The Global Institute for Women’s Leadership at King’s College London labelled the UK’s requirements for private sector companies to report gender pay gap data ‘light touch’ when compared to ten other countries around the world.
Currently, UK private and public sector companies with over 250 employees must produce a report each year analysing the gender pay gap within their business. This report must include overall gender pay gap figures, the proportion of women to men in each of four pay bands, information on the employer’s gender bonus gap and the proportion of male and female employees who received a bonus. Employers may also choose to set out an action plan to address any disparities, but this is not mandatory.
The report identified several areas in which the UK fell behind other countries in its pay gap reporting legislation.
It called for businesses with fewer staff to fall into the requirement to report data. The current threshold of at least 250 workers is five times the average for the countries analysed, and leaves concerns that pay gaps in smaller companies will go unreported and unchanged. Sweden currently operates under a system where employers with only 10 workers must still report their data. Laura Jones, research associate at KCL’s Global Institute for Women’s Leadership, said: “other countries show that it can be done in a way that isn’t an extra burden for smaller employers.”
The report also suggested that the UK should make it compulsory for reporting employers to produce an action plan that sets out ways in which gender pay gaps can be reduced – the only other country analysed that had a reporting system but no obligation to produce an action plan was Austria. A lack of mandatory action plan risks employers not taking necessary steps to actually reduce any disparities, and instead simply reporting the numbers and continuing as they were before.
Sam Smethers, of the Fawcett Society, said that further steps could be taken to even pay gaps across the population: “It is particularly important that we now move to ethnicity pay reporting alongside gender pay reporting. This is long overdue”. Introducing such a system would make the UK a leader in fighting the pay gap between workers from different ethnic backgrounds.
The requirement to report unequal pay data has been suspended this year due to the Covid-19 crisis. It is necessary for the government to reintroduce it as soon as possible, but with the improvements needed to make it the most effective it can possibly be.