1,500 UK companies miss gender pay gap reporting deadline
Having failed to report their gender pay gap to the UK’s Government Equalities Office by April 4, 2018, approximately 1,500 large British firms could now face legal action.
New legislation means that all British firms, voluntary organizations, and public sector bodies with more than 250 employees have to report the difference in their average hourly pay between men and women; the gap in bonus pay; and the percentage of men and women in each quartile of their business, on an annual basis.
Companies that have failed to comply will receive letters giving them 28 more days to report before an investigation takes place and an unlawful act notice is issued. Failure to comply with the regulations will ultimately lead to an unlimited fine decided by the courts.
Analysis of the 10,014 employers who submitted data in time reveals that, on average, three-quarters of large UK businesses pay men more than women—the average median difference is 9.7% in favor of men.
Construction, finance and insurance, and education, have been exposed as the industries with the largest gaps.
The average company is 52% male, 48% female, but the highest-paid 25% of earners is 63% male. Men are simply more likely to make it into highly paid roles, which drives the gender pay gap at thousands of the companies that have reported their figures.
Even majority-female employers have majority-male top quartiles, hinting at a glass ceiling. More than one in four majority-female companies have more men than women at the top of the pay scale, compared with one in 60 majority-male companies that have more women than men at the top.
In his IZA World of Labor article on gender differences in wages and leadership, Mario Macis observes that gender disparities in leadership positions are economically inefficient because they imply a sub-optimal allocation of female performance.
The Home Secretary, Amber Rudd, also the minister for women and equalities, says that closing the pay gap makes economic sense: “Businesses should see reporting gender pay gap data as just the first step on the road to creating fairer and more equal workplaces across the UK,” she said. “They should be putting action plans in place to break down the barriers to women’s progression in their organisations.”
When it comes to women at board level, Nina Smith suggests that one approach is to focus on increasing women’s representation in senior management positions. That could then establish a pipeline of women with qualifications more directly comparable to those of male candidates. Children are also an important explanatory factor for the divergence in men’s and women’s careers. One solution might be to introduce quotas for fathers in the take-up of parental leave.
Read more articles on the gender divide.