The Equality and Human Rights Commission has launched a consultation on how private and voluntary sector employers* with at least 250 staff can measure and report on their gender pay gap.
Women working full-time currently earn 17.1 per cent less per hour on average than men, with the gap failing to improve in the past three years. The difference in some sectors such as finance, are much wider and the majority of organisations are not aware of their own gender pay gap.
The Commission believes that developing ways for employers to measure and report on their gender pay gap will be a crucial step towards reducing pay inequity by providing greater transparency.
The Commission is working closely with the business sector, including the Confederation of British Industry (CBI) and with the Trades Union Congress (TUC), to develop a consistent way to measure the gender pay difference in organisations.
The aim is to empower private and voluntary sector employers to report on a voluntary basis, but the Equality Bill does contain a reserve power which, if a future Secretary of State chose to use, could lead to mandatory reporting if progress has not been made on a voluntary basis by 2013. The Commission has outlined a range of possible approaches and looks forward to receiving input from a wide range or employers.
Andrea Murray the Acting Group Director of Strategy at the Equality and Human Rights Commission said:
"There is demand from the public for organisations to build their reputation on transparency and sharing information. The way they reward their staff should be fair, and seen to be fair.
"It is a waste of talent, and it is unjust, that forty years after the Equal Pay Act we still live in a society where for every pound earned by our sons, our daughters will take home less than 85 pence.
"The reasons for the pay gap are complex so the Commission will be gathering views from employers on what could work best for their organisations in terms of measuring and reporting information. In particular, we want to hear from employers who have been monitoring their gender pay gap and have made moves to address it."
The Commission will also undertake a baseline survey to find out how many business and voluntary employers are already measuring their gender pay gap. The information gathered will be used to measure the rate of improvement over time.
The consultation closes on 28 October, 2009.
Gender pay gap statistics:
- Women working full-time earn 17.1 per cent less per hour on average (12.8 per cent median) than men working full-time
- The pay gap is even greater for part-time female workers who earn 36.6 per cent per hour (39.9 per cent median) less per hour than men working full-time (part-time male workers also earn 27 per cent less per hour compared to men working full-time)
- Combining full-time and part-time earnings, the overall average gender pay for hourly earnings is 21 per cent (22.6 per cent based on median earnings)
- More female than male employees work part-time (41 per cent of women compared to just 11 per cent of men)
- The full-time gender pay gap is wider in the private sector at 21.7 per cent compared to the public sector at 13.8 per cent
- 17 per cent of private sector employers and 24 per cent of public sector employers have taken action to close the gender pay gap by completing Equal Pay reviews
The members of the Commission's stakeholder group on this project include the CBI, the British Chamber of Commerce (the BCC), Business in the Community (BITC), the Chartered Institute of Personnel and Development (CIPD), the EEF, the TUC, the National Council for Voluntary Organisations (NCVO) and the Women's National Commission (WNC).
Pay and employee statistics above are from the Commission's analysis of data from the ONS' Annual Survey of Hours and Earnings 2008 and ONS' Labour Market Statistics Bulletin Historical Supplement 2009. All pay gaps are calculated from mean hourly earnings excluding overtime.
Data on Equal Pay Reviews are from Lorna Adams et al, Equal pay reviews survey 2008 (EHRC, 2008) and the figure for Executive Directorships is from Sealy, R et al, The Female FTSE Report 2008: a decade of delay (Cranfield University School of Management, 2008).
The Commission's position on equal pay is outlined in more detail is outlined on its website.
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