UK Companies Must Report Gender Pay Gap

Feb. 15, 2016

Building on the Prime Minister’s pledge to end the gender pay gap in a generation, Education Secretary and Minister for Women and Equalities, Nicky Morgan, announced on February 12, 2016, that the government is pressing ahead with legislation to obligate companies with over 250 employees to publish their gender pay gap data, and taking action to make sure that thousands more girls study STEM (science, technology, engineering and maths) subjects at school.

Currently, just 24% of girls take so-called “STEM” subjects, compared to almost four in 10 boys, and the gender pay gap in sectors such as engineering is among the worst across business.

Mean average gender pay gap across 34 OECD countries (graph)

At a glance

  • The average woman in the UK earns 85.5p for every £1 paid to a man
  • Professional women working full-time can expect to earn 22p less than their male colleagues in exactly the same job, with an average pay packet £8,524 smaller.
  • Based on the average full-time working week of 37.4 hours, women are effectively not paid for one hour and 39 minutes of every day. (Source: The Telegraph online, 15.02.2016)

The new regulations will affect around 8,000 employers in the UK — will also obligate companies to publish their gender pay information on a searchable UK website that is accessible to employees and the public. Employers will also have to send evidence of compliance to a government sponsored website.

Key Points

  • Employers will have to publish two single figure pay gaps – both mean and median.
  • Figures will be calculated over a prescribed pay period; employers can then choose the date on which they publish over the following year.
  • Employers will have to publish a separate bonus pay gap figure.
  • Employers will have to publish earnings distribution by quartile.
  • The government will publish league tables, which show the progress employers are making on closing the gender pay gap.

Carillion, Centrica, Deloitte, PWC and Sodexo stated that they support annual reporting. Trade unions TUC and Unison also registered their support, though some concern was expressed about employers only having to publish their pay gap stats, not explain them. Dr Adam Marshall, Executive Director of Policy at the British Chambers of Commerce (BCC), said: 

“While businesses will support the government’s ambition to close the gender pay gap, they will be cautious about the introduction of measures that reduce a complex issue to a set of headline statistics. We’d ideally like to see pay gap reporting piloted among the largest companies, who can more easily absorb the regulatory burden."

"Figures also need to be put into context - businesses should be able to explain these figures, and the government should publish industry averages so firms can benchmark themselves against companies in their sector", Marshall said.

Companies must begin calculating the pay gap from April 2017, 12 months before the first tables are published.

Visualized data on the UK Gender Pay Gap HERE


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