OECD report calls for stronger action on gender pay gaps

A new OECD report highlights the need for greater action on closing gender pay gaps.

OECD countries should expand the share of firms covered by pay gap reporting rules to include SMEs and include temporary workers as well as sanctioning those who don’t comply with reporting regulations, according to a new report.

The report, Reporting Gender Pay Gaps in OECD Countries, says that across 38 OECD countries [developed economies including the UK], on average, the gender pay gap stands at 12.0% – meaning that the median full-time working woman earns 88 cents to every euro or dollar earned by the median full-time working man.

It points out that having accurate information about pay inequity is “a critical first step” to fixing the gender pay gap, saying only half of OECD countries (21 of 38) now require private sector employers to report gender-disaggregated pay information. Of these, in almost half (10 of 21, and not including the UK), pay reporting requirements are embedded within more comprehensive, mandatory, equal pay auditing processes that often require follow-up action to address inequalities.

Among the reports recommendations are that countries should expand the share of firms covered by pay gap reporting rules: many countries exclude small and medium-sized firms from reporting requirements and carve out temporary and part-time workers from company headcounts. It says missing these workers out of the figures means that more precarious workers are overlooked in reporting in many countries. It points to novel non-pay gender data reporting requirements – for example, on gender gaps in contract type, promotion rate, level of seniority and hours worked – that governments have put in place to highlight different components of gender inequality in workplaces

The report also calls for governments to enforce pay gap reporting and include sanctions to ensure that the mandated companies participate in pay reporting, provide the correct data, and share results appropriately. It reports that very few countries have systematic compliance mechanisms in place and says sanctions against non-compliant firms are generally weak.

Other recommendations include calls for firms to: report gender-disaggregated pay statistics at both the aggregate firm-level and for key subgroups, such as by job category, parental status or seniority and to exploit digital tools and data better.

It calls on governments to consider mandating equal pay auditing processes and action plans to address any inequalities uncovered; assess regularly what works to close the gap; raise awareness of reporting rules and results; and embed gender pay gap reporting in broader, holistic efforts to end gender inequalities in labour markets, society and at home.

The UK was one of the first countries to adopt gender pay gap reporting, but critics say it has since fallen behind as it only requires organisations with over 250 employees to report and there is no mandatory requirement to produce an action report to address any gender inequalities identified.