April 4 sees the first deadline for voluntary and private sector companies to report on the gender pay gap within their organisations. As of late last week 1354 organisations have complied with that requirement out of an anticipated 9000. Is there going to be a last minute rush or are businesses simply not going to comply? And if the majority don't comply what are the chances of getting any meaningful figures published in 2019 (which will be the first indication of whether any companies have improved on the previous year's figures).
Unfortunately there is also room for cynicism regarding the accuracy of the information that has been put online. An investigation by the Financial Times at the end of last year showed 16 companies had published data showing a 0% pay gap and 9 of those also claimed to have 50:50 male to female splits across each of the pay quartiles. According to Jonathan Portes, Professor of Economics and Public Policy at Kings College London those figures while possible were "entirely implausible". Further investigation by the FT resulted in some companies being unable to support the figures they had published when challenged.
The Equality and Human Rights Commission (who the GPG reporting website shows to have a 7.5% gender pay gap, but unusually it's in favour of women) is responsible for taking enforcement action against employers who don't comply. They recently published their draft enforcement strategy and stated that their main focus will be on dealing with employers who have failed to report and they will only look at taking action against employers who have provided inaccurate information if they have the resources to do so.
Arguably the most severe penalty that could be meted out by the EHRC would be an "unlawful act notice" requiring the preparation of an action plan. If such a plan is ordered and the employer "without reasonable excuse" does not comply with it then an unlimited fine can be issued. However, this is a power that EHRC has had since it came into existence and there is no evidence of it ever being used.
Meanwhile the Government Equalities Office (GEO) is reportedly threatening to name and shame companies who do not comply with the duty to report by publishing three lists - one showing which firms have complied with the duty, one showing which are on course to comply and one showing who has failed to register with the Government's online reporting service.
Some of the figures that have been reported make for some interesting reading. Coca-Cola European Partners GB, John Lewis, Department for Business, Energy and Industrial Strategy and the Cabinet Office all seem to be fairly average performers with women's hourly pay being on average between 10 and 15% lower than men's. Clydesdale Bank, Shell International Ltd and Virgin Money PLC all have mean hourly rates for women of between 31 and 37% lower than their male workers. Easyjet Airlines Co Ltd has an average hourly rate for women being 51.7% lower than that for men. Meanwhile a gold star goes to the UK Armed Forces with average women's hourly pay coming in at only 0.9% lower than the men. It should though be noted that it is likely that the majority of the gender pay gaps that are being reported are due to an under representation of female employees in senior jobs rather than females not getting paid the same for doing the same job.
Meanwhile, in the US some states have come up with a new way to tackle the gender pay gap. The proposed solution is simply to bar employers from asking job applicants what they currently earn so that new salary offers are based on the job to be done, not the successful candidate's prior income. The strategy is already enshrined as law in a handful of states with 20 others considering following suit. On the positive side this strategy seems simple and doesn't retrospectively punish business. However, it may be that what looks too good to be true proves in fact to be exactly that. The gender pay gap is simply the difference between the average pay of men and the average pay of women in an organisation irrespective of role. Where men are in more senior (better paid) roles and women are in more junior roles there will be a gender pay gap. In order to tackle the gender pay gap the issue of why there are more women in lower paid jobs and more men in higher paid ones needs to be tackled. The US approach - which may well help with equality of pay - simply doesn't do anything to address this more complex issue.