Gender Pay Gap Law Is A Long Time Coming

New laws that force employers to reveal the gender pay gap in their workforce are a welcome change that will do more to reduce inequality in wages between men and women than legislation passed in the last four decades.

The changes, introduced on Thursday 6th April 2017, will see thousands of businesses record their gender pay gap data for the first time, with the demand that they publish their figures before April 2018. The laws are a long time coming, and I welcome the significant impact they are likely to have on the UK’s existing long-term gender pay gap, arguably doing more for pay parity in the next five years than equal pay legislation has done in 45 years.

The new rules, which are set to be enforced by the Equality and Human Rights Commission, state that companies employing more than 250 people should provide data about their pay gap, the proportion of males and females who fall into different pay bands, along with their gender bonus gap, and a breakdown of how many women and men receive a bonus annually. It is set to affect around 9,000 companies across the UK, which together employ more than 15 million people.

The UK is the latest country to take action to tackle the gender pay gap, which is prevalent in many leading economies around the world. Earlier this month, Iceland became the first country to force companies hiring more than 25 employees to prove they pay all employees the same, regardless of their gender, ethnicity, sexuality or nationality.

Iceland is not the only country to roll out a similar law; Switzerland has one, and the US state of Minnesota. However, Iceland is thought to be the first to make it a legal requirement. It comes as part of a drive by the nation to eradicate the gender pay gap by 2022.

In my opinion, the brave move by Iceland is one that should be emulated by countries across the globe, including the UK. The decision to roll out the new gender pay gap rules in the UK this month are a welcome step in the right direction, however, more needs to be done to ensure smaller businesses are paying both men and women fairly.

There are many proven benefits to gender equality in the workplace. Research has shown that those businesses paying both genders equally are likely to enjoy better financial results than those that do not. A 2015 report from McKinsey & Company, entitled Why Diversity Matters, revealed that the best companies for gender diversity were 15% more likely to have better financial results than their competitors. Therefore, it is in every organisation’s best interests to support the changes in the law rolled out this month.

That said, it seems that many companies are already setting themselves up for failure when it comes to reporting on the gender pay gap. A survey of 145 employers by Totaljobs found that 82% were not reviewing their gender equality or equal pay policies following the new legislation, while 58% did not have complete salary information across roles and gender. Worryingly, more than a third of those firms responding to the survey revealed they were failing to review salaries to guard against gender discrimination.

Furthermore, the research – in which 4,700 employees were also interviewed – found that men were more likely to receive a bonus than women. In the past year, 43% of male respondents had received a bonus averaging £2,059, compared with 38% of women who received an average of £1,128.

The research also showed that 58% of men felt both genders received equal pay, while only 44% of women believed they were paid the same as a man in a similar role. This disparity proves that while legislation is likely to help fix existing issues, there is still a long way to go until attitudes towards gender equality in the workplace is truly achieved.

Overall, the legislation is set to have a positive impact on the lives of women working for large businesses who may not have been paid as much as their male colleagues in the past. The decision to force businesses to publish salary amounts is a brave one, and it is one that will hopefully encourage employers to roll out fairer policies when it comes to pay. That being said, it will be some time until, like in Iceland, smaller businesses are asked to do the same, and so we are in for a wait until we can truly say that the world of work treats men and women with the equality they deserve.

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