UK’s ‘light touch’ gender pay legislation falling behind other countries, report shows

Experts warn Covid risks stalling ‘snail like’ progress, and call on HR to proactively tackle disparities  

Britain is out of step with other countries in not requiring private sector employers to produce action plans to tackle their gender pay gaps, according to research.

The report, Gender pay gap reporting: a comparative analysis, by the Fawcett Society and the Global Institute for Women's Leadership at King's College London, found that the UK is “unique in its light-touch approach” in this area and warned it was falling behind other countries that have "much more robust systems”.

It said that “an approach similar to that seen in other jurisdictions in which employers must not only develop plans, but report on progress towards their implementation, would represent an ambitious step forward in terms of accelerating change”.

In the study, legal experts assessed gender pay legislation in 10 countries, and warned there was “a danger that, without a requirement to produce a plan, the employers that most need to make changes will fail to do so”.

Austria was the only other country that did not make it compulsory for all eligible private sector employers to submit an action plan in at least some circumstances.

Charlotte Woodworth, gender director at Business in the Community, said: “This report is a wake-up call to the government: the gap in pay between men and women will only change when employers are compelled to go further than monitoring the figure and take meaningful action towards equal pay.”

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Charles Cotton, senior policy adviser at the CIPD, said employers should “take the opportunity to publish a narrative” to put their gender pay gap data in context, as well as “an action plan that talks about the steps that are being taken and are planned to be taken”.

Businesses that do this will “send a strong message to employees, investors and customers. HR professionals have an important role to play in helping their employer develop this narrative and action plan,” he added.

And Andrew Bazeley, insight and public affairs manager at the Fawcett Society, called on HR teams to "push for meaningful action plans within their organisations".

People professionals also “need to show leadership by proactively taking steps to tackle pay disparities between women and men”, according to Laura Jones, research associate at the Global Institute for Women’s Leadership.

They should also be “looking at their processes and practices more broadly, to make sure they’re building workplaces that work for everyone”, she added.

However, when researchers looked at the laws governing gender pay reporting in Australia, Austria, Belgium, Finland, France, Germany, Iceland, Japan, Spain, Sweden and the UK, they found the UK was ahead of other countries when it came to transparency and compliance, with 100 per cent of eligible employers reporting their gender pay gaps in 2019.

However, companies have been allowed not to report gender pay gap data this year because of the pandemic.

Woodworth warned: “Covid-19 threatens to halt the UK’s snail-like progress on equality between men and women at work completely. More mothers than fathers have lost jobs, and women made up the majority of those made redundant in the summer. The government should act on the recommendations of this report to ensure women don’t continue to face a lifetime of earning less than men.”

And Sophie Walker, chief executive of the Young Women’s Trust, said: “Identifying a problem is important. Creating a plan to solve it is vital. And as this report highlights, the lack of accountability between employers and government has created a void that women keep falling into.

“We are deeply concerned about the government’s decision to suspend gender pay gap reporting for employers in March, at a time when women’s equality at both work and home is being pushed to its limits. We urgently call on the government to give women reassurances that this reporting will be reinstated in April next year.”  

The report also suggested that the threshold of 250 staff requiring employers to disclose their gender pay gap should be lowered significantly, pointing out that the average threshold across the countries looked at is 50 employees.

“Lowering the minimum employee threshold for gender pay gap reporting would also enable us to get a more complete picture of how women are managing through the current economic disruption, and other countries show that it can be done in a way that isn't an extra burden for smaller employers,” added Jones.

Responding to the report, a spokesperson for the government's Equality Hub said: "The government is committed to levelling up and making the UK a country where equality of opportunity exists for everyone.

“As part of this, we want to see more employers offering measures such as flexible working and returners programmes, which we know can improve career prospects for both women and men.”