12 FEBRUARY 2016

Closing the gender pay gap – it is good news that companies must report, but will they be compelled to act?

We have warmly welcomed the draft reporting gender pay gap regulations, published today for consultation, but calls for meaningful penalties for companies who fail to act.

Sam Smethers, Fawcett Society Chief Executive:

“The new requirements on employers offer the best opportunity in a generation to close the gender pay gap and are a significant step towards changes Fawcett and others have campaigned for. In recent years progress has stalled. To realise the Prime Minister’s commitment to “close the pay gap in a generation” we need a game changer and these proposals bring us closer to that. In particular the requirement for companies with over 250 employees to publish both their mean and median pay gap is very welcome although we are concerned that companies will not have to publish their methodology so it will not be clear how they arrived at this figure.

We are also particularly pleased that companies will need to show how many women and men work in each income quartile and reveal the gap in bonuses – issue that might be hidden in single average figures.

However ‘naming and shaming’ employers that do not comply is not enough and there is still no requirement for companies with large gender pay gaps to act on these results. Without stronger penalties and pressure for companies to take action, those employers who are doing the right thing risk being undercut by those who won’t play by the rules. This is too important to leave it to the best employers to drag the others into the 21st century. Without action from all organisations we won’t see meaningful change.

Simply reporting the gap is not enough. We’ve got to get serious about addressing the causes. A commitment to increase women taking STEM subjects at A-Level is welcome. But to reap the benefits of investing in girls’ education we need to make sure the workplaces they go into are compatible with balancing work and care and actively promote female talent.

Fawcett is calling for all jobs to be advertised as flexible unless there is good business reason not to; a dedicated period of paid leave for dads that they can afford to take out to care and action to make sure the best women are properly rewarded and promoted.

These are draft regulations and Fawcett will be responding to the consultation and will be seeking input from our members and supporters for our response.

Key Stats:

  • The pay gap for full time workers in the UK is 13.9% [1].
  • The pay gap has been closing but progress has stalled. At the current rate of progress (2010 -2015) it will take over 50 years to close the gap for full time workers [2].
  • The gap varies across the life course – it is at it’s lowest for women in their twenties (1.3%) [3] and opens up significantly for women in their fifties (19.7%)[4]. However Warwick University research shows male graduates consistently earning more than female graduates in the same jobs (£24-27K vs £21-24K) [5] and Young Women’s Trust research shows a gender pay gap of £2,000 at apprenticeship level [6]. It is also wider for some BME women, women in certain occupations (e.g. skilled trades where it is 20.8%, financial services and insurance where it is 35.2%) and women on higher earnings [7].

The pay gap also differs across sectors of the economy. For example it is over 20% in the skilled trades and less than 5.1% for those working in sales and customer service.

There’s no one cause of the gap – important factors are discrimination, undervaluing roles predominantly done by women, dominance of men in best paid positions and unequal caring responsibilities

More statistics and detailed comment on the causes of the gender pay gap are available on request

For more information or interviews call Fresh Communication on 0845 0945 468

Calculating the pay gap:

Fawcett calculates the pay gap using the ONS data on mean average male and female hourly earnings. The mean average is calculated by adding up the hourly pay of all men or women and dividing it by the number of men or women included in the data.

1)Mean hourly pay gap, excluding overtime ONS Annual Survey of Hours and Earnings 2015 (provisional) http://www.ons.gov.uk/ons/publications/re-reference-tables.html?edition=tcm%3A77-400803

2)Mean hourly pay gap, excluding overtime ONS Annual Survey of Hours and Earnings 2015 (provisional) http://www.ons.gov.uk/ons/publications/re-reference-tables.html?edition=tcm%3A77-400803

3)Mean hourly pay gap, excluding overtime ONS Annual Survey of Hours and Earnings 2015 (provisional) http://www.ons.gov.uk/ons/publications/re-reference-tables.html?edition=tcm%3A77-400803

4)Mean hourly pay gap, excluding overtime ONS Annual Survey of Hours and Earnings 2015 (provisional) http://www.ons.gov.uk/ons/publications/re-reference-tables.html?edition=tcm%3A77-400803

5)Warwick Institute of Employment Research 2013, FuturetrackStage 4 Report http://www2.warwick.ac.uk/fac/soc/ier/futuretrack/findings/stage_4_report_final_06_03_2013.pdf

6)YWT 2015, Apprenticeships, where the pay gap first appears http://www.youngwomenstrust.org/what_we_do/media_centre/press_releases/319_apprenticeships_where_pay_gap_first_appears

7)Mean hourly pay gap, excluding overtime ONS Annual Survey of Hours and Earnings 2015 (provisional) http://www.ons.gov.uk/ons/publications/re-reference-tables.html?edition=tcm%3A77-400803