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Everything you need to know about the government’s “trailblazing” gender pay gap initiative

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Sarah Biddlecombe
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Back in April, the government launched a “trailblazing” initiative to help tackle the gender pay gap. Here’s everything you need to know.

Under the government’s new initiative, all voluntary, private and public sector employers with 250 or more employees will have to publish their gender pay gaps.

The information is visible on a new government website, and the companies involved have until April 2018 to submit their figures.

The new initiative means that almost half of the UK’s workforce – 9,000 employers and over 15 million employees – will have to be transparent about any disparity in pay between men and women. 

The landmark initiative made the UK one of the first countries in the world to require such reporting, and the figures will have a much larger scope than anywhere else in the world. Germany has introduced a similar scheme, but only for companies with 500 employees or more, while the pay gap information in Australia is kept private rather than shared on a public domain.

The gender pay gap in the UK is currently at 18.4%: the lowest figure on record, but still a huge difference in overall salaries.

Now, almost half-way through the first year of the scheme, hundreds of companies have been sharing their gender pay gaps online. Speaking to stylist.co.uk, Anne Milton, Minister for Women, said, “Despite the Equal Pay Act being passed nearly 50 years ago, too many women are still held back in their careers. During that time the gender pay gap has reduced, but it has not reduced enough.

“The pay gap won’t close on its own – we all need to take action to make sure we address this. That is why we have introduced a legal requirement for all large employers to publish their gender pay and bonus data by April 2018. I’m pleased that some of our top companies are leading the way and have already reported. By shining a light on where there are gaps, they can take action to address them‎. There are no excuses: employers now need to get on with the job of publishing their pay gap and pledge to improve workplace equality.”

The gender pay gap in the UK is 18.1%

The gender pay gap in the UK is 18.4%

And explaining the initiative in further detail at a media briefing, Caroline Dinenage, Parliamentary Under-Secretary, said the “exciting” initiative would enable companies to start tackling their pay gaps.

“The data is going to be out there for the world to see, so it’s a great way to incentivise companies to do something about it,” she said. “We are a great believer that what gets measured gets managed, and what gets published gets managed even better.”

Under the new regulations, employers are required to publish their mean and median pay gap figures, as well as the proportion of men and women in each quartile of the pay structure. They will also need to reveal the gender pay gaps across any bonuses paid out during the year.

Dinenage pointed towards a number of reasons behind the UK’s current gender pay gap, including maternity leave, career breaks, a lack of opportunities and gender bias.

“We need to make sure companies have really good flexible working offers and shared parental leave, and that they are getting great women back into work,” she said.

She added that the government would  be providing support for businesses on how best to implement structures including flexible working and shared parental leave, as well as providing toolkits and advice. 

pay gap

“The data is going to be out there for the world to see, so it’s a great way to incentivise companies to do something about it.”

As well as (finally) giving women a fairer career path, the benefit to the economy of leveling out the gender pay gap could be huge.

By eliminating the gap, we could add £150 billion to our annual GDP by 2025 – a figure that Dinenage has referred to as a “ridiculous amount of money”.

She now hopes the initiative will encourage employers to see the benefit of maximising the potential of every person in their workforce, whether male or female.

“Why wouldn’t they want to bring women back into the workforce after a career break, and make most of the skills and talent and training they have paid for them to have over their career?” she asked, referring to the typical drop-off of a woman’s earnings after she has had a child.

While requiring companies to report on their gender pay gaps won’t immediately solve the problem, it could certainly help pave the way to a solution.

“[The initiative] doesn’t address the gender pay gap, but it shows you where it is and where it’s concerning – and which businesses within that sector are concerning,” Dinenage said.

“I think it will focus the mind. There will be some companies that realise their gender pay gap is significantly worse than they thought – there might be an unconscious bias, and they don’t know they’re doing it.”

maternity leave

“Why wouldn’t employers want to bring women back into the workforce after maternity leave?"

The new tool also gives women the option to suss out a potential employer’s gender pay gap, helping them decide whether they really to want to work for certain companies – or not.

“We want women to be able to make a really educated decision about who they go and work for,” the Minister added.

And for those who discover that their current employer has a unpalatable gender pay gap, help is at hand: the Equality and Human Rights Commission is working to ensure that regulations are properly implemented, while the government is planning to review the high cost of tribunals.

Here’s hoping the wheels of change are finally in motion…

“We want women to be able to make a really educated decision about who they go and work for."

“We want women to be able to make a really educated decision about who they go and work for."

Images: iStock