Mind the Gap
According to news this week, women in their 20s have seen the pay gap halve to 5%, but when they hit their 30s and start a family, the gap widens.
In short, women the workplace still earn significantly less than their male counterparts during the course of their careers, despite an improvement in pay differentials during the first decade of employment.
So despite the pay gap closing when women start to work, the ‘pay penalty for when they have children will remain, irrespective of the progress made early on in their careers.
Many women are still trapped in low-paid, sectors of the economy with limited advancement, whilst the cost of childcare has soared. Subsequently, thousands of new mothers are forced out of their jobs each year due to maternity discrimination and the majority of tax and benefit changes have fallen on the shoulders of women.
The gender pay gap may be at a ‘record low’ according to the government, and the introduction requiring all large employers to publish their gender pay and bonus gaps data, has been developed to make a difference.
But will it? Does it just cover too small a market?
The Unknown Gender Pay Gap in SMEs
It’s only employers in England, Scotland and Wales with 250 or more employees that are required to publish their gender pay gap report before 4 April, 2018.
Then how can we learn about the significant number of smaller organisations which perhaps don’t have an equal opportunities practice because they simply don’t have a dedicated internal HR function? SME’s actually account for 99.9% of private sector companies and most third sector organisations. Furthermore, firms with fewer than 500 employees form a very sizeable, profitable sector of the UK economy. Excluding sole traders, people working in this sector represent a staggering 48 per cent of the UK workforce.
Unfortunately, it’s these smaller organisations that may be less likely to undertake an equal pay review or to address any staff pay discrepancy, despite many I know already having flexible working arrangements in place to support their workers.
Transparency, tick. But change? Maybe not immediately…
In our opinion, the new regulations simply also won’t go far enough at the moment; but it will, in effect, serve as an initial snapshot.
There is no legal requirement for companies to act on the data that they publish. They are simply required to publish it. They won’t be required to carry out detailed equal pay audits, which is the main equal pay law reform that trade unions have been campaigning for.
Reporting might encourage those employers who aren’t doing so already to look more broadly at other factors behind pay differences. This includes things like the impact of motherhood and the distribution of family and caring responsibilities on women’s paid work, or on female staff progressing to higher level managerial positions or their entry the more male-dominated business areas.
Ultimately, I think that we may all have to wait just a bit longer for transparency to convert to reality.
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