Gender Pay Gap Law Set to Have a Significant Impact in the Workplace

Laws set to come into effect next week will force employers to disclose details of the gender pay gap in their companies.
It is hoped that the new legislation will do more to reduce the gender pay gap.
Employers will have to publish their figures before April next year for the first time.

The law will be upheld by the Equality and Human Rights Commission and will require companies with over 250 employees to provide data about their pay gap, the proportion of male and female workers in different pay bands and details of bonuses.
It is thought that more than 9000 companies across the UK will be affected by the move and that 15 million people will be employed by these companies nationwide.

The changes could have a massive impact on the UK's gender pay gap, said Sarah Henchoz, employment partner at law firm Allen & Overy. "The gender pay gap reporting provisions are likely to do more for pay parity in five years than equal pay legislation has done in 45 years," she said.

The government aims to eliminate the gender pay gap by 2025 and would add £150bn to the economy if successful.  It is hoped that by forcing companies to disclose details of gender pay gaps that any underperforming in the attempt to work towards greater equality will be forced to make some changes.

A 2015 report from McKinsey & Company, 'Why Diversity Matters', showed that the best companies for gender diversity were 15% more likely to have better financial results than their competitors. Further research from the consultancy revealed that without sustained action, the UK's gender pay gap would not close until 2069.
"Although administratively complex, this regime is good news for equality and gender diversity, which means it is good news for the bottom line," said Henchoz. "Research has established a link between greater financial performance and diversity, particularly within the senior leadership team."
The implementation of the law will be quite difficult, with research suggesting that many UK employers are not ready for the change. Less than half say they have enough salary information to report.
A survey of 145 employers by Total Jobs indicated that over 80% were doing nothing to review their gender policies regardless of the new legislation.

The research, in which 4,700 employees were interviewed, found that men were more likely to receive a bonus, and that these bonuses were likely to be larger. In the past year, 43% of male respondents had received a bonus, averaging £2,059, compared to 38% of women, who received an average of £1,128. While 58% of men felt both genders received equal pay, only 44% of women believed they were equally paid.

The government says the new rules will help employers identify their weaknesses and take steps to tackle them. "Helping women to reach their full potential isn't only the right thing to do - it makes good economic sense and is good for British business," said the minister for women and equalities, Justine Greening. "I am proud that the UK is championing gender equality and now those employers that are leading the way will clearly stand out with these requirements."

However, others are not so optimistic about the pay gap being eliminated in the near future, with the government figure of 18% disparity between men and women's pay.

"We know that the pay gap between disabled women and non-disabled women is 22%," said Walker. "Tackling the complexity of the gender pay gap means going much further than the government's current proposals and businesses should be leading the way."


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