UK gender pay reporting rules will not fix the problem, charity says

Research finds stakeholders ‘unanimously’ agree that organisations with pay gaps need to be compelled to produce action plans for addressing disparities

UK gender pay gap reporting “has no teeth” and is focused on monitoring rather than fixing wage disparities, research has found, ahead of the enforcement of the pay reporting deadline tomorrow (5 October).

Analysis by the Global Institute for Women’s Leadership at King’s College London and the Fawcett Society, which compared gender pay gap reporting systems across a number of countries, put the UK joint last, in part because there is no mandate for employers that do have a gender pay gap to take steps to close their gap.

The research also criticised the UK’s reporting system for not requiring employers to report beyond statistics, although businesses can choose to provide an ‘action plan’ during the reporting process.

Researchers scored the countries across 11 indicators and awarded the UK a score of four out of 11 – joint lowest with Australia. In contrast, Spain, which was graded the best, received a score of 8.5.

France, Sweden and South Africa were also among the countries that scored higher than the UK.

The research interviewed more than 80 stakeholders, including government officials, trade unions, academics and gender equality advocates, and found that those in the UK were unanimous in saying that organisations with pay gaps needed to be compelled to produce action plans for closing their gaps.

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These needed to have clear goals and timelines, and spell out how they intend to improve hiring practices, progression, promotion and policies around family leave and flexible working, the research said.

However, the research did find that there was high approval among interviewees regarding the transparency of the gender pay gap reporting in the UK, given that it is publicly available and easily usable.

“This report shows the limits of simply tracking the problem, rather than trying to fix it,” according to Charlotte Woodworth, gender equality director at Business in the Community (BITC).

Unless employers are compelled to take action on their gender pay gaps and required to share how they are going to tackle persistent pay inequality, she said the UK will continue to see “painfully slow” progress on gender equality.

Woodworth also cited BITC’s research which found, of the more than 6,000 employers to have reported their gender pay gap data this year, 5,531 pay men more than women on average. 

“People should be paid fairly, regardless of their gender, race, religion, or ethnicity,” she stated, adding that until women are equal to men in the workplace, “we cannot claim that we live in an equal or fair society.”

Felicia Willow, chief executive of The Fawcett Society, told People Management that gender pay gap reporting is not enough on its own and the UK is well behind other countries in taking more meaningful action. 

“The UK government must urgently introduce the requirement for employers to publish mandatory action plans detailing how they plan to close their pay gap,” she explained, highlighting that the current regulations are not tough enough.  

The study made recommendations to improve UK gender pay gap reporting legislation, including establishing a legal obligation to publish action plans and lowering the minimum employee threshold that dictates which employers need to report. 

It also suggested the introduction of automatic fines for non-submission of reports and an increase in the capacity of the Government Equalities Office and Equalities and Human Rights Commission to provide better guidance and conduct more rigorous monitoring and analysis of submitted data.