Will Gender Pay Gap Reporting prove effective?

New rules on gender pay gap reporting which come into force from 6 April aim to encourage equal pay in the workplace, but there are still question marks over how effective they will be.

In broad terms, the legislation will require employers with 250 or more members of staff to publish online the average salary and bonus figures for men and women within their organisation.

The new rules aim to address the imbalance in pay between men and women in the workplace. The Office for National Statistics has reported that although the median gender pay gap for full time employees has narrowed over the past two decades from 27.5 per cent to 9.4 per cent, men still have a pay advantage over women.

Private and voluntary sector organisations in scope will have to publish their gender pay gap reports on their own websites as well as on a government website no later than 4 April 2018. The data should include hourly pay rates and bonus figures starting from the period 6 April 2016 to 5 April 2017. The reports will have to remain online for a period of at least three years.

Commenting on the new rules, Carolyn Brown, head of RSM’s client legal services practice said:

‘The positive challenge of these new rules is to raise awareness of the gender pay gap in the workplace with a view to ensuring that men and women are equally recognised for their contribution to the business.

‘However, while the legislation should, in theory, improve business transparency and gender equality, there are currently no formal penalties for non-compliance or for publishing inaccurate information.

‘In addition, the published data won’t be sufficient to paint an accurate picture of whether there is an imbalance in pay between men and women doing exactly the same jobs.

‘What these rules will do is impose a reputational risk on those businesses who either fail to report or fail to adequately explain any gender pay gap. Whether they lead to positive change to address that imbalance, only time will tell.’