Mind the (Gender Pay) Gap

The Equal Pay Act received royal assent as long ago as 1970, but the quest for equal pay is still ongoing.

The Government has recently proposed significant changes to tackle the existing gender pay gap which are outlined in the draft Equality Act 2010 (Gender Pay Gap Information) Regulation 2016 and we have discussed these changes previously.

Briefly, the draft regulation requires private and voluntary sector employers with 250 or more employees to publish data outlining inequalities in pay between men and women including:

  • The difference in ‘mean pay’ between male and female employees;
  • The difference in ‘median pay’ between male and female employees; and
  • The difference in ‘mean bonus pay’ between male and female employees.

The first data is due to be published by April 2018.

According to a recent report produced by the Institute for Fiscal Studies (IFS), the overall pay gap between men and women has lessened over the last two decades; however the gender pay gap is reported to widen considerably when women return to work after having children.

The IFS Briefing Note 2016 reports that “after the child arrives, there is a gradual but continual rise in the wage gap over the following 12 years, until it reaches a plateau of around 33%”. The IFS Briefing Note further highlights that the gap between pay was linked to some women electing to work fewer hours after having families. It is likely that part time work may prevent women from being considered for promotion, and results in fewer women at the higher echelons of organisations.

The Shadow Minister for Women and Equalities, Angela Rayner, has called on the Prime Minister, who has vowed for equal treatment and opportunity throughout her political career, to wipe out wage discrimination in the UK and ensure that women are not faced with a financial penalty when they have children.

From an employment law perspective, if employees are denied promotion or paid less because of a protected characteristic such as their gender or pregnancy/maternity status, this could give rise to a discrimination claim. In order to help prevent unequal treatment in the workplace and particularly to reduce the pay gap of women with children and other employees, it has been suggested that more senior part-time jobs are created and flexible working arrangements are offered at all levels within organisations.  At present, all employees who have worked for the same employer for at least 26 weeks are eligible to make a statutory application for flexible working by their employer and have it considered, but there is no obligation on employers to agree to such requests.

The gender pay gap is directly linked to wider issues on women’s participation in the workforce and this will continue to be a hot topic, as companies begin to publish their gender pay data.

Dominic Bonham