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UK Companies Are Going to Be Forced to Reveal the Difference Between What They Pay Men and Women

Two main factors driving the pay gap are more men than women entering higher-paid professions and vice versa, and more women than men working part-time and flexible hours which are often low paid.
February 12, 2016, 1:43pm
Foto di Andy Rain/EPA

British firms and NGOs will be obliged to publish data revealing their gender pay gap under plans announced by the UK government on Friday.

Companies and organizations with more than 250 employees will be required to publicly reveal the difference in average pay between male and female employees — both mean and median — taking salaries and bonuses into account. They will also have to publish the number of men and women in each pay range to show where the gender pay gap is biggest.

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The median hourly pay gap in the UK between male and female employees, full-time and part-time, is 19.2 percent. For full-time employees it is 9.4 percent, a figure that has stayed about the same for four years‚ and in the top five percent of earners it's 46 percent. The main reasons for the pay gap are more men than women entering higher-paid professions and vice versa; more women than men working part-time and flexible hours; and discrimination in recruitment and the workplace.

These tendencies are driven in large part by traditional gender roles and expectations about what men and women are capable of and more suited to, and a lack of high-quality higher-paid part-time and flexible work options for women who need time off for pregnancy and child care.

As well as forcing companies to reveal their pay gaps — which the government will compile into a document that shows how different sectors are performing — the UK is also aiming to get thousands more girls studying math and sciences at senior school level each year, to give them the skills to get into higher paid professions.

Related: British Women Are Working for Free From Today Until January

The regulations, which will affect about 8,000 businesses, will come into force in April 2017, with organizations required to start collecting data then and publish it in April the following year.

The information will not be separated into figures for full-time and part-time work. The fact that women are much more likely to work part time is one of the main reasons for the pay gap, and so publishing separate figures risks hiding the average gap between men and women overall.

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The information must be published on company websites. The government is also going to use it to create a searchable "league table" ranking different sectors against each other, which will be accessible to employees and the general public. It has not yet decided whether it will publish a table of individual companies, reported the Financial Times.

The new requirements were formulated following a government consultation on how to close the gender pay gap which concluded last year.

More than 80 percent of employers and business organizations consulted agreed that the publication of gender pay information would encourage employers to take action to close the gender pay gap.

Companies may not even be aware that they have gender pay gaps until they analyze the data, the government said in its response to the consultation published on Friday — meaning obligatory transparency would be useful.

The government announced 500,000 pounds ($725,000) in funding to help companies implement the new regulations. It also said it wanted to tackle the root causes of the gap by getting 15,000 more girls to take math and sciences A Levels (equivalent to a high school diploma) by 2020 — around a 20 percent increase on current numbers.

The Confederation of British Industry, the UK's leading business lobby group, warned the league tables should not end up as a "box-ticking exercise" and equally should not be used to "name and shame" firms. The data would only be able to present a partial picture, "given factors such as the mix of part-time and full working and sectoral differences," said Carolyn Fairbairn, its director general.

However the Chartered Management Insitute took a much more positive view, saying publication of gender pay gap data was proven to speed up progress towards closing it. "The transparency of reporting on gender pay and the gender pipeline will be a watershed in accelerating change," said chief executive Ann Francke. "Simply put, what gets measured gets managed — and what gets published gets managed even more."

Follow Miriam Wells on Twitter: @missmbc