In Depth

Gender pay gap: will naming and shaming firms work?

Businesses are wary of the new measures while critics argue they don't go far enough

Companies that fail to pay women as much as men will be named and shamed under the government's new league table-style rankings.

The plans were first unveiled after last year's general election but detailed rules published today show employers will have to disclose "far more data than they had expected", says the Financial Times.

The rules will come into effect in 2018, giving companies more time to prepare for the changes than previously thought.

The measures form part of the government's plan to eliminate the gender salary gap within a generation.

Women in the UK earn, on average, around 80p for every £1 earned by men and are also about a third less likely to receive a bonus on their salary.

Companies and voluntary organisations with more than 250 employees will be forced to reveal the number of men and women in each pay range. Data will then be published in league tables.

"It is understood there will be a number of metrics to be reported on, including mean and median calculations, bonuses and earnings distribution across different levels of income and seniority," says The Guardian.

Nicky Morgan, the women and equalities minister, said the measures will ensure there is "nowhere for gender inequality to hide". 

The new rules have been welcomed by campaigners. "We firmly believe in the adage that 'what gets measured gets managed,'" said Brenda Trenowden of the campaign group 30% Club.

However, some in the business community argue the figures could be misleading.

CBI director general Carolyn Fairbairn said publishing such data "will only be able to present a partial picture" because of the "mix of part-time and full working and sectoral differences".

She added: "The government should consult closely with business to ensure that this new legislation helps close the gender pay gap, rather than ending up as a box-ticking exercise."

Others believe the measures do not go enough as the government has no plans to enforce the requirement to publish the data.

Frances O'Grady, the TUC's general secretary, said she was "disappointed" firms won't have to publish their gender pay gap figures until 2018.

She added: "It's a real shame that bosses won't be made to explain why pay gaps exist and what action they will take to narrow them."

Her views were echoed by the shadow minister for women and equality, Kate Green. "At this rate, it will be another 47 years until the gap is closed, so we haven't a moment to lose," she said.

Gender pay gap: employers forced to reveal bonus disparity

26 October

New laws will force larger employers to publish the amount they pay to men and women in bonuses in an effort to reduce the gender pay gap.

Speaking on the BBC's Andrew Marr show yesterday, Nicky Morgan, the minister for women and equality, said the rule was a "first step" that would "concentrate minds". There will also be other measures to boost transparency, including extending delayed pay transparency rules to the public sector.

Pay transparency rules will apply to businesses with more than 250 employees and will require them to publish details of the average pay, now including bonuses, for both men and women in their employ. 

The rules were initially contained within an Equality Act passed by the then Labour government in 2010, but which has not yet been implemented. They will now come into force in the first half of next year and will include a target for every large listed company in the UK to have female representation on its board.

Women in the UK earn, on average, 19 per cent less than men, and are about a third less likely to receive a bonus on their salary. Up to the age of 40 there is little difference between the genders, but beyond it there is an ever-widening discrepancy.

The TUC's general secretary Frances O'Grady said publishing salary and bonus information was a "start" but employers needed to look at why women were still being paid less than men and "do something meaningful about it".

The union has called for the measures to be extended to medium-sized businesses and for fines to be introduced for non-compliance.

Gender pay gap: what's wrong with Cameron's plan?

14 July

The government will force large businesses to reveal the difference between the salaries of male and female employees in what it says is an effort to close the gender pay gap.

David Cameron, who says he wants to eliminate the salary gap within a generation, says the measures will put pressure on companies to increase women's wages. Currently, women are paid just 80p on average for every £1 a man earns.

A consultation on the matter will begin later today, with the rules likely to come into effect early next year for companies with more than 250 employees.

But the Prime Minister's plans have drawn sharp criticism from the opposition as well as businesses. Labour has welcomed the move in principle, but criticised the Tories for being too slow to act on pay transparency, the BBC reports.

During the coalition government, a voluntary policy on pay transparency was pushed forward by the Liberal Democrats – but strongly opposed by the Conservatives. Yet, the Tories included the introduction of gender pay audits in their election manifesto.

Reacting to today's news, former Lib Dem equalities minister Jo Swinson said her party "fought tooth and nail" with the Conservatives to get them to agree to "even minimal changes" to help close the gap and accused the government of not aiming high enough.

 "Saying we can afford to wait for another generation to close it is, to put it mildly, unambitious," she said. "The UK economy is currently missing out on the talents of too many women."

Business group have also attacked the measures. "Not all companies will cheer the introduction of compulsory gender pay gap reporting, because it takes a complex set of issues and reduces it to a few headline statistics," said Adam Marshall, executive director of external affairs and policy at the British Chambers of Commerce told City AM.

Meanwhile, the Confederate of British Industry has warned that publishing figures on average pay could be "misleading" and says it favours a voluntary approach, The Guardian reports. It has, however, pledged to work with the government to try to ensure flexibility in how the new rules are applied to each company.

While progress on the gender gap has been made in recent years – in 2014 it was at its narrowest since records began – campaigners and businesses warn there is still a lot of work to be done to achieve true gender equality in the workplace.

John Allen, Chairman of the Federation of Small Businesses, urged companies to keep up the momentum and "break down the remaining barriers that prevent women progressing in the workplace and the boardroom". These hurdles include institutional sexism, soaring childcare costs and a lack of flexibility for working mothers.

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