UK is ‘unique in its light-touch approach' to tackling gender pay gap, report finds

Feeble approach at holding firms to account hindering wage equality

A woman working full-time now earns on average £5,000 less a year than a man

The UK takes a uniquely “light-touch approach” to addressing the gender pay gap in the private sector and trails behind other countries, a report has found.

Researchers at King’s College London and Fawcett Society, a leading gender equality charity, warned other nations have much more “robust systems” to tackling the issue.

The study, which examines gender pay gap reporting laws in 10 countries, found the UK takes a more feeble approach at holding employers to account over how they solve wage bias.

Rules obliging private companies who employ more than 250 people to release their gender pay gap figures – five times the average of 50 employees for the countries analysed – have been suspended by the government due to coronavirus turmoil.

However, it has never been compulsory for private-sector employers in the UK  to produce an action plan to address pay bias – with the Government Equalities Office estimating only around half elected to do so in 2018-19.

Austria was the only other country researchers found that does not obligate all private-sector employers to submit an action plan in at least some situations.

This sharply differs to France where legislation means if private-sector workplaces do not get an adequate score across a set of gender pay gap barometres, an action plan must be drawn up with trade unions or employee reps.

Laura Jones, research associate at the Global Institute for Women’s Leadership at King’s College London, said: “Without a requirement to produce a plan to close gender pay gaps, there is a risk that employers simply won’t take the action that is necessary. 

“Lowering the minimum employee threshold for gender pay gap reporting would also enable us to get a more complete picture of how women are managing through the current economic disruption, and other countries show that it can be done in a way that isn’t an extra burden for smaller employers.”

Sam Smethers, chief executive of the Fawcett Society, said: “Gender pay gap reporting has been a useful way to get employers to reflect on pay inequality in their organisations and to begin to address it. But it needs to be reintroduced as soon as possible with key changes made to make the system more effective.

“It is particularly important that we now move to ethnicity pay reporting alongside gender pay reporting. This is long overdue.”

It comes after a report, conducted by Business in the Community, found half of companies did not report their gender pay gap this year, with the number of firms releasing such information having halved since 2019.

The study, which came out in May, warned coronavirus upheaval could push women’s equality back by a generation due to them being overrepresented in sectors most badly hit by lockdown measures and already being more likely to work in lower-paid, more precarious forms of employment.

Last year’s reporting showed the gender pay gap has widened in favour of men at nearly half of the biggest firms and public sector bodies in the UK since the previous year – with almost 8 in 10 companies still paying men more than women and more than a quarter paying female workers up to 20 per cent less.

Additional reporting by agencies