The government will finally introduce regulations for mandatory reporting of the gender pay gap within organisations of more than 250 employees, in the next twelve months or so.
This is a change of tune, the government previously having taken the view that voluntary reporting under the “Think, Act, Report” scheme would do the trick. Around 275 employers signed up to “Think, Act, Report” but to date, the Guardian reports that only 5 employers have reported on their gender pay gap under the voluntary regime. Clearly there’s another significant gap somewhere between lip-service and action. So why has voluntary reporting failed?
When I did public sector equal pay litigation, I always used to think it unfair that it was those organisations who had accepted the equal pay issue onto their agenda and who had actually done work on standardising their pay systems who could be most easily picked off by no-win no-fee lawyers looking for easy wins; whereas those employers whose systems were completely opaque were overlooked by those same lawyers as presumably just too difficult. Staying below the radar was therefore a logical choice for an employer.
I think this is why voluntary reporting hasn’t worked. Why would a company who cared about remedying the pay gap, put itself “out there” for criticism for not being perfect, when its even less perfect competitors could just stand back and let them take the PR hit? Compulsory reporting levels the playing field and makes it worth an organisation’s while to care.
It might be optimistic but I hope that over time, armed with this information, women will vote with their feet to the companies and organisations where their prospects are best, giving employers a clear economic incentive to implement good, creative and positive practice to eliminate the pay gap, because it makes sense to get and keep the best people. And not just “professional” women, but all women, across all sectors.
And of course, men benefit from equal pay too. The Women and Work Commission has estimated that closing the gender pay gap has significant macro-economic benefits; and the children of low paid mothers (boys and girls) are bound to feel a particular benefit from measures which bring about equal pay.
Of course some other stuff has to change too. When I was reading around for this blog, one of the articles I read on the gender pay gap reporting requirements in a quality newspaper was accompanied by a (no doubt targeted) ad for washing powder. One step at a time then…
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