📣 EQUAL PAY ESSENTIALS | PRESSING PAUSE ON PAY TRANSPARENCY 📣
Background
Since 2017, companies in the UK with over 250 employees have been required to disclose pay information and report annually on their gender pay gap under the Equality Act. ⚖️
On 8 March 2022, or in that year, International Women’s Day, a pilot scheme was launched to enhance pay transparency further. This initiative required employers to:
The scheme aligned with research from the Fawcett Society, which found that:
These findings highlighted the risk that pay discrimination could follow individuals throughout their careers, underscoring the need for greater pay transparency to enable fairer salary negotiations, particularly for women. ♀️♂️
What happened to the scheme?
Despite its promising goals, the scheme was paused in May 2024. 🛑
The government stated that pay transparency is still an emerging area and they did not know whether there would be unintended negative consequences.
Another reason for the pause was the opportunity to observe how other countries implement similar legislation. The EU Pay Transparency Directive, which came into effect in June 2023, requires employers to publish data on pay gaps and mandates corrective action when the gap exceeds 5%. By monitoring the outcomes of such initiatives, the UK aims to refine its approach and avoid potential pitfalls. 🌍
What does the future look like?
For now, the UK government has shifted its focus to broader pay gap reporting. However, the revival of this pilot scheme, or a similar initiative, has not yet been confirmed.
Meanwhile, the EU continues to lead the way in advancing pay transparency. It is crucial that the UK keeps pace to avoid falling behind in addressing wage inequality. As public demand for transparency grows, it is hoped that the UK will adopt more robust measures in the near future to promote fairer and more equitable workplaces.
Veteran | Chief Executive Officer at spktral
4moAlex Harper I am sure you are all over this, but to make it crystal clear for all readers. The directive does not require an employer to do more work if their unadjusted pay gap is bigger than 5% (UK pay gap is unadjusted). The pay gap they are talking about is the ‘Adjusted Pay Gap’ where the employer has done a piece of work to place employees into categories that reflect same/similar work at the same levels. So “all sales managers with equal responsibilities inside London”. Then, if this adjusted gap is bigger than 5% AND there is no non-gender related reason for the difference - further analysis is required. I can see why this was paused in the UK. Approximately 40% of UK PLCs can’t even perform basic pay gap reporting let alone this. This process demands a robust data process, good legal employment advice and access to an amazing statistician to ensure assertions are not turned into actions. Nigel Marriott Spktral