Prime Minister vows to force employers to reveal gender pay gap

Measuring the gender pay gapA consultation begins today on plans by the government to force larger companies with more than 250 employees to reveal the difference between the average pay of their male and female employees. Writing in today’s Times Prime Minister David Cameron says he is making a personal commitment to ensure that when his daughters aged four and eleven start work they will experience complete gender equality. Although the gender pay gap has narrowed to almost zero amongst the under 40s, ONS figures show that by the age of 40, men out-earn women by an average of £1.64 per hour, while according to the recent PwC annual Women in Work Index, the UK still lags well behind many other countries in overall female economic empowerment. The new consultation will be wide ranging and will look at who will be required to report, as well as the content, frequency and manner of reporting.

Writing in the Time the Prime Minister said the proposed legislation would: “Cast sunlight on the discrepancies and create the pressure we need for change, driving women’s wages up.”

Commenting on the proposals, the CBI appeared to favour a more voluntary approach as in the way the creation of more diverse company boards has been steered by the Lord Davies Women on Boards review, which it says, demonstrates the value of encouragement as opposed to using the law.

Said Katja Hall, CBI Deputy Director-General:

“Addressing the gender pay gap is the right priority – and we should set a target for reducing it. While we believe publishing pay gap data could be misleading, we will work with the Government to ensure that rules on what is published are flexible enough to be relevant to each company.”

Legal experts also warn there might be some difficulty in determininghow best to assess pay levels.

Advised Nicola Rabson, global head of employment & incentives at Linklaters: “The most vexing issue is likely to be the level of detail that is required to be published – an overall pay comparison of the pay of an organisation’s male and female employees will provide considerably less information than a job-by-job comparison.

She adds: “Although at this stage there is little concrete action for employers to take, businesses may well be inclined to respond to the consultation, which closes on 6 September.”