The glaring problem with the government’s new rules on gender pay gap reporting
Written by Amy Beecham
A change in government policy means thousands of employers are no longer required to report their gender pay gaps. Stylist explores why this could be a huge step backwards for women in the workplace.
Here’s a grim fact for you: last year, women in the UK were paid 90p for every £1 earned by a man.
According to the most recent government gender pay gap report, in industries including finance, communication and construction, the median gap widened, with women receiving 88p, 83p and 76p respectively compared to their male counterparts.
And while you might be thinking that it can’t get much more disappointing, it can. Because Liz Truss has just announced plans to exempt tens of thousands of employers from reporting obligations as part of a “sweeping package of reforms to cut red tape”.
Previously, employers with over 250 staff were required to submit payroll figures to the government each year as part of gender pay gap reporting regulations. Now, however, the government will expand this threshold to 500+ employees from 3 October. The government has even proposed extending the threshold to businesses with 1,000+ employees in the future, “once the impact on the current extension is known”.
Mandatory gender pay gap (GPG) reporting was introduced in April 2017 with the aim of narrowing and eventually eliminating the pay differential between men and women.
Since then, campaigns such as the Fawcett Society’s yearly Equal Pay Day – which marks the day when campaigners say women effectively start to work for free for the rest of the year because – have highlighted just how far there is to go until we reach equality. Last year, that day fell on 18 November, meaning there were 30 working days in 2021 where women effectively received no compensation for their labour.
But that isn’t the only gap. Research commissioned by the non-profit organisation People Like Us earlier this year shows that workers from Black, Asian, mixed-race and minority ethnic communities are being paid only 84% of what their colleagues in similar roles are earning.
Surely without accountability, the gender and race pay gap will only widen? Stylist spoke to three industry leaders who fear that the move will turn the clock back for women at work.
“It’s much more than just a number on a page”
“The gender pay gap is the difference between the average (mean or median) earnings of men and women across a workforce. But while it looks like just a number on a page, in reality it means so much more,” explains Neha Thethi, head of employment at Lime Solicitors.
“Not only does it impact women in the moment, but it actually has a compounding effect over a woman’s lifetime.”
“Discrimination and unconscious bias are just the tip of the iceberg when it comes to the causes of the gender pay gap. Scrapping gender pay reporting would be a huge step back for gender equality in the workplace.
“We already know that women still disproportionately face barriers to promotions and higher pay when compared to their male peers. Without clear structures like pay reporting to support women in the workplace, gender discrimination can go unnoticed and unchanged, holding women back from progressing in their careers.”
“Without transparency, the workplace will never be equal for women”
“No woman in the UK should have to enter the workforce questioning whether they are paid the same as their male counterparts,” says Jill Cotton, career trends expert at Glassdoor.
“Gender pay gap reporting holds companies accountable and requires employers to be transparent. While not perfect, the reports removed some of the barriers faced by women at work and gave salary insights into a huge variety of companies that would otherwise be very difficult to come by.
Ultimately, Cotton says, without transparency, the workplace will never be equal for women.
“Why? Because salary is still a taboo subject. And we are a long way from employers truly embracing the levels of transparency needed so that gender pay gap reporting is no longer required. A quarter of women feel they are not fairly compensated for their work. But 52% are apprehensive about discussing pay with their line manager and almost the same number (56%) lack the confidence to ask for a pay rise.”
According to Cotton, employers need to create an open workplace culture in which employees know they are valued and compensated fairly.
“All employees, regardless of their gender, race, ethnicity and abilities, should know that they are being paid fairly for the job they are doing. Removing gender pay gap reporting for thousands of companies makes it more difficult for employees and job hunters to do so,” she adds.
“Now more than ever we need advocates for women in work”
“It’s a step backwards across the board,” shares Natalie Trice, PR director at Devon Trice Public Relations.
“There is no doubt at all that we are still facing a huge issue when it comes to equality in the workplace as well as society as a whole. By taking these actions away from organisations that are critical in creating a wave of change, the message from the government is that this doesn’t matter and what women are paid – or more importantly what they’re not paid – isn’t of concern.
“Now more than ever we need advocates for women in work and by reporting on pay and conditions there is an element of accountability, and when you take it away it would seem that problems are being swept away. This is about more than box ticking and compliance; it’s about the worth of women in the workplace.”
Stylist has reached out to the Cabinet Office for comment.
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