Companies Warned to 'Mind the Gap' on Gender Pay

Posted on the 25 August 2016

Companies Warned to 'Mind the Gap' on Gender Pay

Companies are being warned to act now to address any gender pay gap issues in the wake of research showing that men are still paid an average of 18% more than women.

Employment experts at law firm Ward Hadaway, which has offices in Newcastle, Leeds and Manchester, say that the report from the Institute for Fiscal Studies (IFS) is a wake-up call for businesses who face compulsory gender pay reporting in less than a year's time.

The IFS research found that women earn 18% less per hour than men on average. The IFS also found that the gap balloons after women have children, raising the prospect that mothers are missing out on pay rises and promotions.

That is echoed by a separate report from the Chartered Management Institute suggesting that male managers are 40% more likely than female managers to be promoted.

Fiona Campbell, Solicitor in the Employment Team at Ward Hadaway, says that the research is a timely reminder that companies need to face up to any issues they may have when it comes to pay and bonuses for male and female employees.

Fiona explained: "Whilst legislation has been in place for some years to prevent men and women being paid different rates for equivalent jobs, the overall gap between how much male and female workers are paid does remain.

"There are a range of different reasons for this and companies can still be scrupulously fair on how much their employees are paid yet still have a gap in overall gender pay and bonus rates.

"This is one of the reasons why the Government is introducing compulsory pay and bonus reporting. Whilst this initially only applies to large companies, there is a good chance it will be introduced for smaller businesses in the years to come so companies would do best to be prepared for what it brings."

In April 2017 - only eight months away - a snapshot will be taken of what all companies with a workforce of 250 or more staff pay to their employees that month.

Those companies will then have until April 2018 to publish those figures online, both on their own website and on a Government website.

The public and employees will be able to access these figures and judge for themselves whether they believe there are discrepancies in terms of what companies pay to their male and female employees.

Fiona Campbell said: "The publication of gender pay figures could cause some companies to be faced with some awkward questions and unwanted publicity about the way they run their businesses and pay their employees – even if there are good reasons for any pay gaps highlighted.

"As a result, we are urging businesses affected by the gender pay reporting rules to take action now, to look at their pay structures and identify and address any particular issues which arise.

"As well as helping to prepare businesses for the scrutiny that will accompany gender pay reporting, this process could also be a good opportunity for companies to review their remuneration and potentially improve this area of their business."