WorkLife

Our thoughts on the world of employment law - and beyond.

Mind the Gap – some thoughts on closing the unequal pay gap

New figures reveal that men are being paid in excess of 13% more than their female counterparts across London, according to the Office for National Statistics. It's surprising (and alarming) to think that for every £1 paid to men per hour last year, women received only 86.8p (apparently down from 89.1p a year ago).  Indeed, these figures are in fact 'better' than those in other regions: London has the smallest pay gap compared with the rest of Britain. 

Of course, it's not as simple as that – it never is.  It's not the case that employers across the country consciously decide to pay women less than men and peg their remuneration accordingly (and invariably, commentators on equal pay articles make that point, saying something like 'I've worked in payroll for 40 years and no-one's ever told me to pay our female employees less than the men").  Rather, it remains more insidious and longer-term factors that are at play, and which contribute to the depressing forecast that it will take a further 60 years, at the current rate of change, for the gap to be closed.

What caused the equal pay gap?

This is a big question to ask in a short post and to be honest, I'm not sure that anyone truly can say they know the 'one' answer.  But broadly speaking, there are often said to be four main 'historic' causes of unequal pay: 1. the impact of motherhood on women's careers; 2. job segregation and the idea of "women's work"; 3. the lack of quality part-time work for individuals with caring responsibilities; and 4. the lack of women in senior roles. There are some interesting thoughts on the wider 'myths' around equal pay in this Guardian article (particularly in the comments section).  For the ONS London figures I mention above, there is speculation that the trend is being underpinned by bigger bonuses going to men in the City.

What can employers do to reduce the gap?

It's hard to envisage any employer actively seeking to promote or indeed continue unequal pay.  But the issue in practice is often much less clear cut – the principle is of course unassailable, but there can be real anxiety about taking any proactive steps to assess pay equality, for fear they may unearth a can of worms, potentially handing out ammunition for claims, and leading to significant outlay and discontent. 

Scare stories litter the newspapers about years of back-pay falling due. One frequently hears of companies saying they are concerned there may be an issue but that they are tempted to wait for it to raise its head via an equal pay claim, rather than risk stirring up a hornets' nest without having any concrete catalyst to do so.  It will be interesting to see whether employers will feel that the proposals for mandatory equal pay audits following a successful equal pay claim will mean earlier, preventative action becomes more attractive (I suspect not). 

But in principle at least, the following steps are ones which employers concerned about the issue could consider taking in order to address it before forced to do so by the advent of a claim.  It may well not be that simple, but it is a start:-

  1. Equal pay audits: take the bull by the horns, discover and seek to remedy any (potentially inadvertent) gender-based inequalities within the organisation. 
  2. Job evaluation schemes: ensure that jobs grouped within the same band are treated as equivalent and paid on the same scales.
  3. Be transparent about rewards systems: be clear to staff why people are paid in the way that they are.
  4. Look at the availability and rates of pay for flexible working and non-standard working arrangements.  Take steps wherever possible to promote these and sniff out any lingering stigma which may still be associated with them.
  5. Look at levels of female representation at senior management and board level – consider what steps, if any, need to be taken to ensure greater short and medium term gender-balance.

There are no easy solutions here, and employers will need to consider the extent they feel able to be pro-active in addressing any concerns.  But a good place to start may well be to look at the cultural assumptions within our organisations about these issues, and consider the extent to which a sea-change in those norms may still be required.

 

 

 

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