UK gender pay gap legislation ‘has no teeth’

A new report from the Global Institute for Women’s Leadership says the UK, once a leader on addressing the gender pay gap, has fallen behind because other countries are going further faster.

Gender Pay Gap

 

UK legislation aimed at tackling the gender pay gap “has no teeth” and is focused on monitoring the problem but not actually fixing it, according to a new study.

The research, by the Global Institute for Women’s Leadership at King’s College London and the Fawcett Society, comes ahead of the extended deadline for reporting gender pay figures this month. It analysed gender pay gap reporting systems in the UK and five other countries: Australia, France, Spain, Sweden and South Africa. It found the UK ranks joint-last among these nations for the strength of its system in part because it doesn’t mandate that employers with pay gaps take steps to address them.

Researchers scored the countries across 11 indicators, awarding the UK a score of four out of 11 – joint-lowest with Australia. By contrast, Spain, which was graded the best, received a score of eight and a half.

The study involved interviews with more than 80 stakeholders in the various countries, including government officials, employers, trade unionists, academics and gender equality advocates, all with in-depth knowledge of gender pay gap reporting systems.

Almost all of those interviewed in the UK said that organisations with pay gaps need to be compelled to produce action plans with clear goals and timelines, spelling out how they intend to improve hiring practices, progression, promotion and policies around family leave and flexible working, in order to address pay disparities between women and men.

The study does, however, praise the UK for the transparency of its reporting system, as well as its high levels of compliance, which enables scrutiny of employers by the public, media and others – but says this pressure is not always enough to drive organisations to action.

The report emphasises the need to change the system “from a monitoring tool to an action tool”, bringing it into line with the recommendation of the UN Committee on the Elimination of Discrimination Against Women that the UK government encourage employers to take appropriate remedial measures to close pay gaps.

Other countries analysed in the report do mandate action, such as France where companies that fail to address identified gender inequalities can face heavy penalties of up to one per cent of company payroll.

According to the Government Equalities Office, between 2017/18 and 2018/19, around half of the gender pay gaps reported by UK employers narrowed. The study says that, while this could be taken to suggest the reporting system is having a positive effect, almost the other half of reported pay gaps went in the other direction, widening over the same period – although it says that the short timeframe means it is too early to judge the system’s true impact.

A further way to improve the UK system, the study says, would be to lower the minimum employee threshold for reporting gender pay gaps, which stands at 250, “well above” the other countries surveyed, such as Sweden, where the threshold is 10 employees, and Spain, where it is 50. This would signal the priority given to the issue, says the study.

The report calls for a legal obligation for employers to publish action plans, the lowering of the minimum employee threshold, the introduction of automatic fines for non-submission of reports and better guidance and support and more rigorous monitoring and analysis of submitted data.

Professor Rosie Campbell, Director of the Global Institute for Women’s Leadership at King’s College London, said: “At one point, the UK led the field on gender pap reporting – but it’s now falling behind other countries that are going further, faster. The transparency that enabled naming and shaming of poorly performing organisations and highlighted success stories was groundbreaking, but other nations are currently doing more, importantly compelling companies to act on identified pay gaps, so they don’t just track the problem but also do something about it. This is vital: gender equality is both an urgent economic goal and a moral imperative – one we mustn’t lose sight of in the wake of a pandemic that has disproportionately impacted women.”



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