Call for linking of ethnicity and gender pay gap reporting

The gender pay gap and the ethnicity pay gap need to be on an equal footing to take account of intersectional equality issues, a meeting of the All-Party Parliamentary Group on Women and Work heard yesterday.

Dianne Greyson, founder of the #Ethnicitypaygap campaign, said progress on the ethnicity pay gap has been slow with most of the discussions centring on the reasons why it would be difficult to implement it rather than any action on making it happen. She pointed out the mental and physical health toll on those trying to fight the pay gap due to stress and anxiety. A survey of black women in January showed over half of respondents reported a pay gap of between 3K and 10K pounds a year.

She also cited a TUC report showing how black women are disproportionately affected by external factors such as austerity cuts, tax and benefits changes and spending on public services. She said they were being penalised twice due to being women and being black.

And she mentioned a report out this week which suggests there has been a 50% drop in employers reporting on their ethnicity pay gap in the last year which she says shows the need for reporting to be mandatory.

The Women and Equalities Committee recently held a session on ethnicity pay gap reporting which covered the issue of making pay gap reporting mandatory.

Other speakers agreed at the APPG on women and work agreed that it should be mandatory. Jemima Olchawski, CEO of the Fawcett Society, said there is a need for more intersectional data on the gender pay gap.

UK falling behind

She spoke of how gender pay gap reporting was a step forward as it forced employers to look at the data and to realise that they may have an issue in their own organisation rather than dismissing it as something that happened elsewhere. Moreover, she said, research showed that larger employers which reported their gap gap had increased women’s pay [in relation to men’s] by 1.6% on average compared to those employers who didn’t have to report and that women were more drawn to employers who have a smaller gender pay gap.

However, having made progress on the gender pay gap, she said, the UK is now falling behind and the voluntary approach to publishing action plans is not working. ONly half of employers publish a narrative about their figures and just one in five have a meaningful action plan.

The Fawcett Society would like to see action plans becoming mandatory and would like all employers of over 100 people to have to report their figures. Currently gender pay gap reporting applies only to employers of over 250 people [around a third of the workforce], but this is a high figure compared to other countries such as Australia and Iceland.

Olchawski added that gender pay gap changes had to run alongside other initiatives to tackle the pay gap, such as its campaign to end employers basing pay on people’s salary history, which she said locked in gender inequality and imported unfairness. In the US 21 states and cities have banned salary history questions and the evidence showed that this narrowed the pay gap, especially when people are changing employer.

She also called for a right for women to know what their male comparators are earning to make it easier for them to take legal action over equal pay.

Low pay

Josie Irwin, national women’s officer at Unison, pointed out that fact that women tend to occupy the lowest paid jobs, meaning that even in the NHS where women predominate there is a gender pay gap – in 2019 60 NHS trusts had pay gaps above the national average. Local authorities did better, but 17% had pay gaps above 20%. Nevertheless, a quarter of NHS trusts and a third of local authorities had no gender pay gap, showing it could be done. She is worried that the gender pay gap is increasing, which could be linked to additional caring responsibilities during Covid which had forced some women to reduce their hours and some to leave their jobs.

She is wary, however, of looking at top line figures and says these can disguise the impact, for instance, of outsourcing lower paid workers in social care or cleaning. She wants to see employers digging deeper into the figures to see what parts have lower percentages of women and what impact part time working and age have. Unison is also interested in intersectional factors and has launched a trailblazer project to promote action plans and share what works.

It is also calling for a day one right to flexible working and for all jobs to be advertised as flexible where possible and for action plans to be mandatory.

Shareholder action

Caitlin Schmid, a researcher at the University of Manchester, spoke of her work with the Global Institute for Women’s Leadership comparing the effectiveness of gender pay gap reporting around the world.  The report showed that the UK was falling behind and focused more on monitoring than on action.  It wants actions plans and gender pay gap narratives to be embedded in a more holistic equality analysis which would be intersectional and the figures to be contextualised so all the factors that contribute to the pay gap are understood.

It also called for a lowering of the employee threshold for reporting gender pay gap figures – in Sweden it applies to employers of over 10 employees, for instance. And Schmid said there should be an automatic fine for non-submission of figures as well as greater analysis of the data which could address structural issues such as the undervaluing of women’s work generally.

In the Q & A section, a representative from ShareAction said it would shortly begin a campaign pushing for ethnicity pay gap reporting for leading employers in the financial services sector.

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