2018 is the year we need to get serious about the gender pay gap
Data quality is emerging as a crucial battle line in the fight to close the gender pay gap. Recent coverage on gender pay gap reporting raises troubling questions about the accuracy of the information companies are publishing.
If the last year has taught us anything, it is we need a greater sense of urgency in tackling pay inequality. Latest figures from Whitehall show an eleven per cent pay differential between women and men. The BBC pay debacle further highlighted the embedded nature of the gender pay gap.
The clock is ticking on businesses to meet the deadline for new gender pay gap reporting requirements. Today’s announcement by the Equalities and Human Rights Commission (EHRC) that businesses failing to comply with gender pay gap reporting could face unlimited fines is welcome, but there is more to be done.
Under new regulations around 9,000 major employers, who have more than 250 employees, are obliged to declare their data on gender pay by 1st April 2018. But, with the deadline looming, barely 300 of the 9,000 affected employers have published data so far.
Closing the gender pay gap is a serious and pressing issue for the UK. We currently languish near the bottom of the EU gender pay gap league table, and the current headline figure for the UK’s gender pay gap of 18.4% has barely moved in the last five years. We need to do much better.
However, the low numbers of businesses reporting is disappointing, and, even more worrying is how businesses appear to be manipulating figures when they do report.
The regulations require companies to report both their mean and median hourly pay gaps. Around 1-in-20 companies have reported that they have no gender pay gap at all, on either measure. Whilst not impossible, this is extremely implausible. Eight companies reported that they have exactly identical numbers of men and women in each quartile of their pay ranges, another highly unlikely outcome. When challenged by the FT, one company, Hugo Boss, admitted that their reported figure of a 0% median gender pay gap, was actually an astonishing 76.5%, meaning that the median female earner at Hugo Boss makes just 23.5p for every £1 made by the median male earner.
These revelations highlight the weakness of the regulations and the urgent need for independent scrutiny. The EHRC has launched a consultation that could see fines and legal action against companies that fail to comply with the regulations. These sanctions need to make it into the final rules governing the new regime. Teeth are required not just a bark. Given the scale of this task the EHRC also needs to have the resources and ability to investigate breaches and ensure compliance.
One solution, in addition to adding financial penalties for non-compliance, would be to give an explicit right to challenge gender pay figures published by employers and to access the underlying data. A gender pay audit is not an end in itself, but a tool to inform discussions about employment practices and workforce planning.
This is especially critical given questions about the UK’s economic future post-Brexit. Research suggests that closing the UK’s gender pay gap could add £150 billion to the economy, increase the availability of high-value STEM skills by encouraging more women back into the workforce, and help to close the UK’s productivity gap with its peers. But this is also of course fundamentally a basic issue of justice: we cannot build a fairer and more equal society while women remain underpaid and undervalued, and companies would do well to remember that when considering their response to the gender pay gap regulations.
Employees, and the trade unions that represent them, have a central role to play in giving these regulations teeth and making real progress towards pay equality. Only last month Prospect celebrated the great success at the Met Office where the gender pay gap has been virtually eliminated and a new pay structure introduced for the whole organisation.
40 years on from legislation banning sex discrimination in pay, it is time to make 2018 the year we deliver. We stand ready to work with other employers and to contribute our wealth of experience and expertise.
Sue Ferns is senior deputy general secretary of Prospect and a member of the TUC General Council. She tweets at @fernssue