Gender pay gap: from loopholes to enforcement

So, with just over a week to go there are still around two thirds of organisations who have not published their gender pay audits. Are they hoping to pass under the radar by herding together in the last days and will some not report at all? Legally, organisations with over 250 employees have to report their figures by 4th April, but it is still unclear what happens if they don’t. The Equality and Human Rights Commission says it will impose “unlimited” fines on those who don’t report, but this has yet to be tested and some consultants have been advising employers that nothing will happen. Campaigners have called on the government to increase the Commission’s enforcement powers.

What is clear is that many employers are feeling fairly sensitive about the legislation due to the potential reputational risk and the possible furore that revelations may cause internally. A Dispatches programme this week showed how a whole new role of gender pay consultant has sprung up to advise companies on what they should do. For the most part the advice is to publish the figures, analyse any gender pay gap and explain what you are doing about it. Employers will then have to show that they have actually followed through as they will be held to account when next year’s figures come out. However, some consultants appear to be trying to exploit loopholes to get around the legislation.

Dispatches showed how employers who had just over 250 employees were being advised to lose a few to get them under the threshold or to create a subsidiary company to hive off the senior level of employees who are more likely to be men and whose higher salaries widen the gender pay gap.  Some were told to remove their – mainly male – directors from their figures on the grounds that they were owners of the business and their earnings were already published.  Such ploys could, however, backfire. What is good about the gender pay audits is that the legislation has created a real buzz around the whole earnings issue and has brought a lot of publicity. At a time when big data is fuelling investigative journalism, expect many to crunch through the figures and subject them to close scrutiny. Employers who report a 0% pay gap are already triggering a higher level of inspection.

The gap itself is a hard one to address. It’s not the same as equal pay for work of equal value, which is in itself the subject of several current legal wrangles [for instance, the case of supermarket shop floor staff – mainly women – against – mainly male – warehouse employees]. What is clear from the figures published so far is that there is an overwhelming lack of women in senior roles. Research shows the reasons are multifaceted.

Labour has said it will tighten the legislation around gender pay reporting and fine those employers who don’t make progress. Actually measuring true progress will require a lot of resources. It’s not enough to have the policies and processes in place. There must be evidence of ongoing impact. Yet many are still struggling to discover what might work within their organisation and their sector. Even those who have put a lot of effort into tackling the problem are not always making huge progress because turning around well established social norms is not easy and requires continuous work.  It will require a lot more resources all round – and will – to really make progress. We will be watching with interest what happens next.

*Mum on the run is Mandy Garner, editor of Workingmums.co.uk.

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