Firms ‘must reveal gender pay gap’

Businesses with 250 employees or more must disclose the gender pay gap in their workplaces starting from next year, the Conservatives announced on Tuesday.

Prime Minister David Cameron said in a letter to the Times that the move will “pressure” firms into boosting women?s wages, as he vows to eliminate the gender pay gap “within a generation”.

The prime minister also said the move will “cast sunlight on the discrepancies and create the pressure we need for change, driving women?s wages up”.

The policy will account for data on 10 million workers in the UK and while Office for National Statistics figures from April point to the pay gap being at its narrowest since records began in 1997, in some places it?s as high as 20% – meaning that for every pound a man earns, a woman earns 80p.

Some commentators have said a simplistic approach of eliminating uneven salary negotiations altogether will lead to an eventual closing of the pay gap. Others, however, say the situation is more complex than that and a widespread cultural change in UK workplaces is required.

“It is vitally important that this isn?t just seen as another exercise in collecting workforce data but creates a real opportunity for business to consider and understand the true causes of any gender pay gap. A range of factors other than pay itself such as occupational segregation and workforce composition all need to be taken into account,” Geoff Pearce, managing consultant at NGA Human Resources said.

“Only with this bigger picture will we be able to identify the causes behind gender inequality and take positive steps to tackle it,” he added.

Clare Lyonette, from the University of Warwick?s Institute for Employment Research, said that while the news is welcome, there is still a long way to go before equality is reached. “The legislation needs to ensure transparency and a real culture change within organisations, otherwise this may become just another tick-box exercise.”

Speaking to Sky News, Labour?s equality spokeswoman Gloria De Piero described the announcement as “good news”, but called for the Conservatives to go further. She said: “For pay transparency to make a real difference, we need to have an annual equal pay check which measures progress and recommends what action needs to be taken – a move the Government voted against earlier this month.”