Skip to content
City PM
  • Germany
  • France
  • Europe
  • Markets
  • Business
  • Opinion
  • Germany
  • France
  • Europe
  • Markets
  • Business
  • Opinion
Monday 04 April 2016 11:19 am

Closing the Gap – will gender pay gap reporting be effective?

By: Catherine Neilan

Add as a preferred source on Google

The obligation for employers of 250 or more employees to report on the gender pay gap is scheduled to become law in October 2016, with the first of the submitted data to be published by April 2018.

As the national gender pay gap hovers around 19 per cent, many employers are likely to be disclosing a gender-related pay discrepancy, which is disappointing given over 40 years have passed since equal pay was mandated in the UK. But what happens next? Will this new law achieve the Prime Minister’s aim of closing the gender pay gap within a generation?

Fundamentally, any step in respect of gender pay equality is a step in the right direction. The new legislation is recognition from the government that more needs to be done, as well as a tacit acceptance that the voluntary reporting regime (‘Think, Act, Report’) did not go far enough. The new regulations have been criticised because there is no legal sanction for disclosing a gender pay gap but this is, perhaps, missing the point.

It is important to understand that a gender pay gap is not necessarily indicative of unequal pay within an organisation. There may be many reasons for a gender pay gap, not all of which are within the control of the employer, and not all of which could form the basis of a successful equal pay claim. 

Pay data itself will not be exclusively determinative of an equal pay issue: this is just number-crunching, after all.

What should be making employers pause from this point forward – given that the reporting obligations cover bonuses and commission paid from 1 May 2016 – is the ‘why’ of any gender pay gap.

The real force of the new reporting obligations is the explanation, if any, the employer gives as to why there is a gender pay gap within its organisation. The publication (or not) of any explanations may, in fact, be the real driver of the promotion of equal pay in the long run. It is this critical information, after all, that can safeguard an employer against reputational issues, retention and recruitment problems, and successful equal pay claims.

In all likelihood, the ‘naming and shaming’ of employers with a gender pay gap will stand or fall on these justifications. As such, the government may want to see how this works in practice before following through on its stated intention to publish ‘league tables’.

These league tables will be a crude tool, polarising ‘good’ and ‘bad’ employers based only on the numbers and without taking into account the underlying context of the pay discrepancy.

Perhaps fittingly then, any progress towards gender pay equality may depend on a willingness to judge books by more than their covers. Or, in this case, numbers.

Share this article

  • Facebook
  • X
  • LinkedIn
  • WhatsApp
  • Email

Similarly tagged content:

Sections

  • Opinion

Categories

  • Opinion

Trending Articles

  • Top Burnham adviser calls for capital gains and inheritance tax hikes

  • Housebuilding giants hit with £4.5bn lawsuit for allegedly overcharging buyers

  • Brewdog chief executive quits after only one year

  • A meeting with the breakfast king of Mayfair

  • As it happened: Stocks jump on defence and metals boost; Oil on track to shed a fifth on US-Iran peace hopes

More from City PM

  • Older women at risk of running out of money as gender wealth gap widens with age

    Personal Finance
    In 2022, rolling Tube strikes led to massive queues for crowded buses. (Photo by Chris J Ratcliffe/Getty Images)
  • Carrying debt into retirement isn’t always bad news

    Opinion
    Woman and man discussing retirement savings, highlighting gender pension gap and financial planning differences
  • Cliff-edge warning: Fewer than 10 per cent of Brits to achieve a comfortable retirement

    Personal Finance
    Jar filled with coins symbolizing cautious saving habits of older Brits avoiding stock market investments for retirement s...
  • Expensify and Playroll Partner to Eliminate Compliance Complexity and Streamline Expenses to Payroll for Businesses Going Global

    Business Wire
  • New mixed gender trophy introduced for coming Hundred season

    Sport Business
    Unfortunately, without specific details about the articles content or the images subject, its difficult to generate precis...
  • Rising salaries for junior lawyers put pressure on senior associates’ pay packages

    Legal
    Burges Salmon partners with legal tech startup Wexler to enhance AI-driven litigation support for UK lawyers
  • Adobe and LinkedIn target AI skills gap in marketing roles

    Tech
    Office for National Statistics
  • Millions of Brits face retirement ‘cliff-edge’ after not saving enough

    Personal Finance
    Mansion House meeting of pension fund leaders discussing investment strategies and financial accords in a grand boardroom ...

City PM — European politics, business and analysis.

Europe

  • Germany
  • France
  • Europe
  • UK & Ireland

Topics

  • Business
  • Markets
  • AI
  • Technology
  • Opinion
  • Energy

More

  • Politics
  • Economics
  • Fintech
  • Legal
  • Sport
  • Life

Company

  • About City PM
  • Editorial Policy
  • Corrections
  • Contact
  • Terms of Use
  • Privacy Policy
  • Cookie Policy
© 2026 City PM · Published by CityPM Media, Bahnhofstrasse 65, 8001 Zürich, Switzerland
About · Editorial Policy · Corrections · Contact · Privacy