In his latest Coffee Break Briefing webinar, Frettens’ own Insolvency Guru Malcolm Niekirk looked at dealing with solvent liquidations with no tax clearance.
This is the summary of that briefing.
A gender pay gap is the difference between women’s and men’s earnings, expressed as a percentage of men’s earnings. The new Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 came into force on 6 April 2017.
Starting from this year, all firms with more than 250 employees in the UK are required to report their gender pay gap. The first results of this were disclosed on 5th April this year by the UK's biggest companies. 5,911 companies had reported pay data as of 29th March.
What were the results?
In short, the figures have shown that the vast majority of them pay men more than women.
However, about 13% pay women more on average than men. Some 7% said they have no pay gap at all.
National median pay gap
The median is the midpoint. If you line up all the men and women working at a company in two separate lines in order of salary, the median pay gap will be the difference in salary between the woman in the middle of her line and the man in the middle of his.
This is calculated on an hourly basis and therefore includes both full-time and part-time workers. The national median is the key measurement used by the Office for National Statistics (ONS).
What patterns exist by sector?
Only three sectors pay women more than men:
- water and waste management
- household services
- mining, perhaps surprisingly.
The sectors where the biggest pay gap exists is finance & insurance. Here are the top 10 sectors with the highest pay gap:
- Finance & insurance
- Electricity & gas
- Education
- Professional & scientific
- Manufacturing
- Communication
- Health
- Retail
- Public Administration
- Construction.
Average woman working in the finance sector earns 35.6% less than average man
Another way of understanding this is that, the average woman in the finance sector takes home just 64p for every £1 that her male colleagues earn.
Of the finance companies that have released their data so far, only 8 of the 279 have a gender pay gap in favour of women. Virgin Money has the highest gap among the sector, with a reported pay gap of 38.4% in favour of men.
How does this compare to other countries?
The UK has come out of this analysis worse than the international average, according to the Organisation for Economic Co-operation and Development (OECD). The UK ranks 11th for the biggest pay gaps, behind Israel, Latvia, the USA and Canada. The UK’s gender pay gap is larger than Mexico, Germany, Australia, Spain and Poland.
South Korea has the biggest gap among OECD countries. Belgium, Luxembourg and Costa Rica are the lowest.
What will happen now?
Requiring companies to disclose information and be transparent with data can be a highly powerful policy tool. Transparency has changed the behaviour of business in a variety of ways, from improving hygiene in restaurants to improving energy efficiency. There has been a steady shift towards equality between gender roles in recent years and the shared parental rights may become a crucial factor in changing the parameters regarding a career gap to bring up a family.
What should employers do about their own gender pay gap?
The implications here are tricky for employers. Answering the question actually raises more questions. If the priority is to close the gap, how much are men willing to sacrifice? If not an actual pay cut, would men accept pay restraint until women catch up? Are all gaps bad? What size of pay gap is a reasonable one? Is complete parity the target?
What about the company which needs rare and highly-paid engineering or IT skills? The labour pool offers up mainly men, reflecting choices made in schools many years before. That's not the company's fault, is it? And should it fall to the company to correct it, or to wider society?
Should the intention be to beat your sector's average? How much will women refer to this new data when they make their choices of career and employer?
Will there be a movement at some point to close an ethnic pay gap?
Paul Burton, Head of Frettens' Employment Team, says “Employers need to go beyond talent attraction and hiring, and look at progression, performance management and reward. Companies need to understand how things like flexible working policies and shared parental leave can help employees of either gender to balance the demands of work and family life, and how this can lead to better lives for men and women.”
At Frettens, all of our solicitors offer a free initial meeting or chat on the phone to answer your questions. If this article raises issues for you or your business, please call us on 01202 499255 and the Employment team will be happy to discuss it with you.
