HR

The Gender Pay Gap

The Gender Pay Gap is not a new phenomenon, but continues to make headlines both in the UK and internationally as women fight for the right to be paid the same as their male counterparts. Despite the 1970 Equal Pay Act and the Equality Act 2010 both making provisions for women’s entitlement to equal pay, figures show that there has been little evidence of the gap closing over recent years and the spotlight is slowly being turned on employers to face up to the issue.

Defined as the average difference between men’s and women’s aggregate hour earnings, the gender pay gap is a complex issue. It can be the result of both direct and indirect discrimination, the devaluation of jobs primarily associated with female labour, the lower hourly wage for part-time workers who are mostly likely to be women and lack of promotion opportunities for part-time workers. It occurs across a wide variety of industries, including qualified professionals, Hollywood actors and actresses and sports men and women.

In November last year, the Office of National Statistics’ “Annual Survey of Hours and Earnings” showed that the gender pay gap for full-time employees stood at 9.4%, a small decrease from 9.6% the previous year. When including part-time employees in the figures, the pay gap rises to 19.2% highlighting further the discrepancy between pay for male and female workers. Some other key points include:

The gender pay gap for full-time employees in the private sector is 17.2% compared to 11.4% in the public sector, although the pay gap has been slightly increasing for public sector employees and decreasing for private sector employees over recent years.
The gender pay gap is a much more noticeable phenomenon for employees over the age of forty. In fact in the 22 to 29 age group, women are paid on average very slightly more than men.
The gender pay gap varies significantly by occupation, for example 4.3% for sales and customer service employees, and 24.6% for skilled trades occupations.

An amendment to the Small Business, Enterprise and Employment Bill tabled by the Liberal Democrats back in March 2015 allows for mandatory reporting of gender pay differences for organisations with over 250 employees. Until now, there has been no legal requirement to cover this, and only a few businesses have cared to disclose this information on a voluntary basis. The Government has yet to finalise the regulations for mandatory gender pay reporting and outline to companies exactly what information they will have to disclose and how. But the prospect of their male and female pay differences becoming public knowledge may prompt employers to look closely at their salaries under a microscope. Remembering that the right to equal pay means women who do the same work for the same employer as a male employee should have the same contractual terms (including the same level of pay) should help employers avoid the employment tribunal.

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