A briefing note of the Institute of Fiscal Studies published on 23rd August 2016 begins:
“If you’re a woman, you will earn less than a man.”
From Theresa May’s first statement as Prime Minister
“Last year Britain was ranked 18th in the world for its gender pay gap... We can and must do far better.”
From Jeremy Corbyn’s campaign speech in July 2016
The briefing note goes on to report:
- The hourly wages of female employees are currently about 18% lower than men’s on average, having been 23% lower in 2003 and 28% lower in 1993.
- Only among the lowest-educated individuals has the gender wage gap continued to shrink over the past two decades. In other words, the gender pay gap had not reduced amongst women educated to A-level or degree level.
- The gender wage gap widens gradually but significantly from women’s late 20s and early 30s – i.e. the point at which many will take time out to have children.
- There is, on average, a gap of over 10% even before the arrival of the first child. The gap is fairly stable until the child arrives and is small relative to what follows: there is then a gradual but continual rise in the wage gap and, by the time the first child is aged 12, women’s hourly wages are a third below men’s.
- The gradual nature of the increase in the gender wage gap after the arrival of children suggests that it may be related to the accumulation of labour market experience.
It has long been recognised that women face difficulties in the workplace. It is for this reason that the Equal Pay Act 1970 was brought into law to offer protection to women, and that the Equality Act 2010 was brought into law to offer further protection to women and other individuals sharing ‘protected characteristics’ (such as race, disability, sexual orientation, etc).
Briefly, the law states that women have an ‘equality clause’ implied into their contract of employment so that (working at the same employer as a male comparator) they should receive equal pay for equal work. There are 3 different categories of equal work:
a) “like work”;
b) “work rated as equivalent”; and
c) “work of equal value”.
Forty-six years after the Equal Pay Act 1970 was passed, though, the IFS briefing note makes predictable reading. It is clear that although some progress has been made, much remains to be done. It is for this reason that s.78 of the Equality Act 2010 gives the government power to make regulations requiring private and voluntary sector employers to publish information relating to their gender pay gap. The requirement for employers to publish this information is expected to come into force in April 2017. It is thought that only employers with 250 or more employees will be affected and the obligations will be to publish information as to:
- The overall gender pay gap calculated using both mean and median average hourly pay.
- The numbers of men and women in each of four pay bands, based on the employer's overall pay range. This should show how the gender pay gap differs across the employer’s organisation, at the various different levels of seniority.
- The employer's gender bonus gap – in other words the difference between men and women's bonus pay over a 12-month period.
- The proportion of male and female employees who received a bonus in the same 12 month period.
Presumably, the purpose of the regulations is to ‘name and shame’ large employers with a significant gender pay gap, and to provide evidence to women who wish to prosecute equal pay claims.
In 2015, the then Prime Minister, David Cameron, pledged to close the gender pay gap within a generation. Whether that occurs remains to be seen.