As the UK’s Gender Pay Gap reporting legislation recently came into force, Suzanne Horne, Head of the International Employment Law Practice at Paul Hastings, explains to Lawyer Monthly the potential effectiveness of the new rules and the implementation thereof.
Whilst the gender pay gap will rightly shine a light on gender pay, the incoming regulations leave a lot to be desired. If public shaming is going to be the stick used to coerce larger employers into reducing their gender pay gap, then the reporting should be an accurate reflection of the gender pay and bonus disparity within the workplace.
As is stands, the reporting won’t reveal whether men and women are paid equally for doing the same or comparable jobs. It will simply show the mean and median difference in pay and bonus remuneration across a particular company. We only need look at a typical boardroom to know that women are woefully underrepresented at senior levels and those at senior levels are paid more. The reporting will tell us what we already know, whilst neglecting to consider the myriad of factors that legitimately differentiate pay such as levels of responsibility, nature of work, experience and geographical location to name but a few.
It is also likely to lead to widespread misconceptions; some may even say ‘Fake News’. One company’s gender pay gap of 50%, for example, might make for great headlines, but it doesn’t mean that the company is in breach of the equal pay legislation. Another company may be able to report a smaller gap, whilst in fact paying women less for doing the same or comparable role.
Due to the government’s preoccupation with Brexit, the gender pay legislation has failed to live up to its potential as a tool to accurately highlight the real issues and will cause a headache for employers who will need to focus on the voluntary contextual information to put the numbers in context.
The gender pay league tables that will emerge a year from now will require employers to step up their D&I initiatives and engage with their PR team but they will not move the needle on the issue of the gender pay gap.
