The inquiry focused on the adequacy and effectiveness of the requirements introduced under the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 (the Regulations) for all private sector employers with 250 or more employees to report their gender pay gap statistics annually from April 2018. Whilst the focus of the inquiry is on business, the Committee notes that many of its conclusions apply equally to public and voluntary sector organisations.
The gender pay gap measures the difference in the hourly earnings of men and women. The median gap across the economy is currently 18% in favour of men. At organisational level the figure in some sectors is much higher, as wide as 40%.
In its report, the Committee welcomes the gender pay gap reporting initiative, but calls on the Government to be more ambitious. It concludes that addressing the gender pay gap is not only necessary in the interests of fairness, it is essential to improving our economic performance.
The report focuses on the need for businesses to drive change through their policies, practices and workforce cultures.
The Committee have made a number of recommendations for strengthening gender pay gap reporting and for businesses and regulators to drive change in tackling the gender pay, which include:
It remains to be seen which (if any) of the above recommendations will be taken forward by the Government. However it is increasingly likely that we will see the reporting thresholds in the Regulations lowered to include smaller businesses than those with 250 or more employees. We will keep you updated with developments in this area.
The report notes that the Committee will continue with the second strand of its inquiry, examining progress of reforms relating to executive pay levels and structure, in the autumn of 2018.