British firms must publish gender pay differences

LONDON • At the current rate of progress, it could take nearly a century before the gender pay gap is closed in Britain. So the government is trying to speed up the process.

Putting pressure on employers to tackle the nation's gender pay gap, new rules that took effect on Thursday will require large companies to publish the average salaries of the men and the women they employ. The regulation affects companies with 250 or more employees.

The figures must reveal information such as salary differences between men and women, differences in average bonuses, and the proportion of men and women who received those bonuses.

The firms have until April next year to report the information to the government, and publish it on their websites and on a government website.

Ms Justine Greening, the Minister for Women and Equalities, said: "Helping women to reach their full potential isn't only the right thing to do, it makes good economic sense and is good for British business."

Under British law, men and women should receive equal pay for the same job. However, there is still a gap between average wages when it comes to gender.

The gender pay gap in Britain was 18.1 per cent last year, dropping from 27.5 per cent in 1997, according to the Office for National Statistics.

Mr Jon Terry, a partner at accounting firm PwC, who advises financial clients on hiring and pay, said the gap exists in large part because there are fewer women in senior roles and the women often do the jobs where pay is lower.

Social scientists said one way to effect change is to publish everyone's pay. Dr Jake Rosenfeld, a sociologist at Washington University, found that salary transparency raised wages, in part because "even being cognisant of gender pay disparity" can change norms.

In Britain, many hope the regulations will prompt firms to examine why the gender pay gap exists.

"It puts such a spotlight on the issue," said Mr Terry. "It's easier to see whether an organisation is taking this seriously."

He said firms that do not grasp the value of reporting the salary information may be persuaded to take it seriously if their reputations are at stake, and they are named and shamed. "The gender pay reporting really smacks them in the face," he said. "If they have a pay gap of 18 per cent, they will get a lot of negative press."

NYTIMES

A version of this article appeared in the print edition of The Straits Times on April 08, 2017, with the headline 'British firms must publish gender pay differences'. Print Edition | Subscribe