Gender pay gap reporting for big firms from 2018

Companies with more than 250 employees will have to disclose how much they are paying in salaries and bonuses to their male and female staff from 2018.  A league table ranking 8000 firms by their gender pay gap will be published from this date. Bonuses will be included in the figures to make sure there is transparency on pay disparity in City firms, where there is suspected to be a particular problem with pay inequality. Estimates from the Office for National Statistics suggest that in the UK on average a woman earns around 80p for every £1 earned by a man. Labour and trade unions said that female employees should not have to wait another two years to find out if they were being systematically underpaid.

Female employees will have to wait another two years to find out if they are paid less than their male counterparts as the government unveiled plans for a league table ranking large firms by gender pay gap from 2018.

In a move long resisted by business groups and parts of the Tory party, companies with more than 250 employees will have to disclose how much they are paying in salaries and bonuses to their male and female staff.

The league table of around 8,000 firms, which the government hopes will draw attention to the worst offenders, will be published from 2018, giving firms some time to address the inequality before their data will appear on the list.

Bonuses will be included in the figures to make sure a light is shone on pay disparity in City firms, where there is suspected to be a particular problem with pay inequality.

It is illegal to pay different amounts to men and women doing the same jobs under the Equal Pay Act. But estimates from the Office for National Statistics suggest the pay gap currently stands at 19.2% for full- and part-time workers in the UK, meaning a woman on average earns around 80p for every £1 earned by a man.

It is understood there will be a number of metrics to be reported on, including mean and median calculations, bonuses and earnings distribution across different levels of income and seniority.

Nicky Morgan, the equalities minister and education secretary, said she believed the measures would help but called on women to demand more from businesses.



“In recent years, we’ve seen the best employers make ground-breaking strides in tackling gender inequality,” she said. “But the job won’t be complete until we see the talents of women and men recognised equally and fairly in every workplace.

“That’s why I am announcing a raft of measures to support women in their careers, from the classroom to the boardroom, leaving nowhere for gender inequality to hide. At the same time, I’m calling on women across Britain to use their position as employees and consumers to demand more from businesses, ensuring their talents are given the recognition and reward they deserve.”

Ann Francke, chief executive of the Chartered Management Institute, said: “Shining a light on what men and women are paid at every level, as well as monitoring the percentage of women at every level, is proven to speed up progress.

“Today, women make up 60% of junior managers, 40% of middle managers and 20% of senior managers. Transparent reporting of pay at every level will tackle the ‘glass pyramid’ that stifles potential and productivity in business.”

However, the timing drew criticism from Labour and trade unions who said female employees should not have to wait another two years to find out if they were being systematically underpaid.



Labour MP Dan Jarvis said women would have had to work effectively for free for more than four months before 2018. “This is a completely unacceptable delay 45 years after the introduction of the Equal Pay Act,” he said.

Frances O’Grady, general secretary of the TUC, said it was a good first step but ministers need to be much bolder. “We’re disappointed that firms won’t have to publish their gender pay gap figures until 2018. There is no need for such a long delay,” she said. “And it is a real shame that bosses won’t be made to explain why pay gaps exist in their workplaces and what action they will take to narrow them.”

She said the pay gap was estimated to take another 47 years to narrow at the current rates of progress.

Business groups were disappointed that they would be forced not just to publish their pay gaps but have them ranked in a league table.

Carolyn Fairbairn, CBI director general, said the ranking “should not be used to name and shame firms, as data will only be able to present a partial picture, particularly given factors such as the mix of part-time and full working and sectoral differences.

“Where reporting can be useful is as a prompt for companies to ask the right questions about how they can eradicate the gender pay gap,” she said.

The former acting Labour leader Harriet Harman initiated the push for government powers to force companies to reveal their gender pay gap in the Equalities Act of 2010 but the coalition failed to enact the provisions in that law, favouring a voluntary approach.

After only five companies voluntarily published the gender pay gap – Tesco, Friends Life, PwC, AstraZeneca and Genesis Housing – the Liberal Democrats argued for the introduction of mandatory reporting, with former deputy prime minister Nick Clegg securing an amendment in March that would force ministers to make regulations on the subject within the next 12 months. The Conservatives included a promise in their manifesto to stick with the policy in relation to companies with more than 250 workers.

David Cameron announced the plans for a mandatory approach after the election, saying the rules would come into force in 2016.