Mind the pay gap

The publication of gender pay gap figures for UK companies in the past few weeks has been a ‘seminal moment’, lawyers say.

However, they have also warned that introducing sanctions against those companies that failed to report could actually make the situation worse for women.

The figures revealed that 78% of employers pay men more than women. The Business, Energy and Industrial Strategy (BEIS) Committee is now calling for written submissions to the gender pay gap inquiry, with a view to examining whether sanctions for non-compliance would be effective and whether it needs to gather more information.

Speaking to LexisPSL Public Law, Lewis Silkin partner Michael Burd said the reporting would ‘undoubtedly be a driver for change’ but did ‘not tell the whole story’.

‘There is a danger that some employees may believe that a gender pay gap at an organisation means that men and women doing the same job are not being paid equally for equal work,’ he said.

‘It does not. A different analysis is needed to determine that. The simple fact is that there are more women in lower paying jobs than men, which is a different issue and no doubt requires different solutions.’

Joseph Lappin, solicitor at Stewarts, agreed, since ‘the figures do not focus on differences in gender pay for comparable jobs’.

‘However, never before has the issue of gender pay been reported as extensively in the media as it has been in the last few weeks. Therefore, in a sense, the reporting regime has achieved one of its key objectives and never before have companies in the private sector invested so much time in considering the issue of gender pay.’

More than 2,000 companies breached their obligation to report. One possible option to remedy this is to introduce sanctions for non-compliant companies.

However, Nick Hurley, partner at Charles Russell Speechlys, cautioned against this.

‘In the short term it may be little beyond naming and shaming,’ he said.

‘While the Equality and Human Rights Commission (EHRC) state they have powers to fine under the existing legislation, it is questionable whether the current regime actually extends this far. What seems likely however is that, in the current climate, an increase to the powers of the EHRC will come if required and those that have not yet done so, should take the opportunity to get their house in order.’

Hurley also warned that employers could do things to improve their gender pay statistics that would not be helpful to their female employees, for example, by reducing their flexible working schemes.

‘Many employers could probably improve their bonus gap percentage, which compares actual bonus amounts and does not adjust for part-time working, by simply clamping down on part-time arrangements,’ he said.

‘But that would not benefit women in the workforce and it would be unfortunate if the reporting requirement drove such behaviours.’

An extended version of this news update was first published on LexisPSL Public Law.