UK ‘unique’ in not requiring private firms to produce gender pay action plans

The UK is “unique in its light-touch approach” in not requiring private employers to produce a plan to tackle gender pay gaps, a report has found.

A report from the Fawcett Society and the Global Institute for Women’s Leadership at King’s College London (KCL) found the UK lags behind other countries, which have “much more robust systems”.

Researchers examined gender pay gap reporting legislation in 10 countries, and say the UK needs to do more to see faster progress on equality.

But their report found the UK is leading the way in terms of transparency and high levels of compliance, with 100% of eligible employers reporting in 2019.

The requirement to report gender pay gap data in the UK was suspended this year due to the coronavirus crisis.

Previously it has not been mandatory for UK private sector employers to publish an action plan to tackle such pay gaps.

And only Wales has a requirement for an action plan where gender pay differences are identified by public sector employers.

Just one other country in the report – Austria – does not make it compulsory for all relevant private sector employers to submit an action plan in at least some circumstances.

The report also calls for companies with fewer staff to be required to report gender pay gap data.

Currently in England, this requirement only applies to private and public sector employers with at least 250 workers.

This is five times the average of 50 employees for the countries analysed by the researchers, suggesting pay disparities in smaller companies are going undetected.

Laura Jones, research associate at KCL’s Global Institute for Women’s Leadership, said: “Without a requirement to produce a plan to close gender pay gaps, there is a risk that employers simply won’t take the action that is necessary.

“Lowering the minimum employee threshold for gender pay gap reporting would also enable us to get a more complete picture of how women are managing through the current economic disruption, and other countries show that it can be done in a way that isn’t an extra burden for smaller employers.”

Sam Smethers, chief executive of the Fawcett Society, said the UK could be a leader by starting to collect and report pay disparities between workers from different ethnic backgrounds.

She said: “Gender pay gap reporting has been a useful way to get employers to reflect on pay inequality in their organisations and to begin to address it.

“But it needs to be reintroduced as soon as possible with key changes made to make the system more effective.

“It is particularly important that we now move to ethnicity pay reporting alongside gender pay reporting. This is long overdue.”

A spokeswoman for the Government’s Equality Hub said: “The Government is committed to levelling up and making the UK a country where equality of opportunity exists for everyone.

“As part of this we want to see more employers offering measures such as flexible working and returners programmes which we know can improve career prospects for both women and men.”