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Will legislation changes address the gender pay gap?

Gender pay gap

​The gender pay gap is a hot topic for many involved in the dynamics of business. There are mixed feelings about what will help close the gulf between the amount the average man and the average woman are paid.

New legislation, which will come into force in 2018, aims to help tackle the problem but some experts have shared concerns that it may not address the issue completely.

In two years time, businesses that have more than 250 employees will be obliged to publish the amount they pay male and female workers, including any bonuses given out. The move, which has been resisted by some business organisations and leading MPs, aims to bring focus to firms who aren't encouraging equality among its workforce.

Since the introduction of the Equal Pay Act in 1970, it's been illegal to pay men and women different wages for the same jobs in the UK. However, figures from the Office for National Statistics (ONS) suggest there is a 19.2 per cent pay gap between men and women.

It is hoped that companies will be encouraged to ensure that both male and female employees have the same opportunities for progression in the two-year period before the legislation comes into practice. Businesses will be supported by a number of government-led initiatives, such as conference events and free online software.

Speaking about the move to publishing wage figures, which must be available on the company's own website as well in official league tables released by the government, Ann Francke, chief executive of the Chartered Management Institute (CMI), said it would encourage more diversity among businesses.

"Publishing league tables will drive diversity, bringing benefits not just to women but to business. Closing the pay gap will open the talent pipeline, increase management quality and boost productivity," she explained.

However, the two-year delay has been criticised by trade unions and many members of the Labour Party.

Frances O’Grady, general secretary of the Trade Unions Congress (TUC), said there was no need for such a long wait.

She also criticised the fact that businesses won't be forced to explain why pay gaps exist in their workplaces or "what action they will take to narrow them".

Critics have said that - without an obligation to also close the gap - the legislation will make little difference.

The issue is that it's very difficult to establish what discrimination women in the workplace are privy to, as the only person that truly knows if a man is being given preferential treatment based on his gender is the employer themselves. This makes it difficult to see the true scale of the problem.

However, it's much easier to see how women's earnings are limited because of the high number of female part-time workers.
The Institute for Fiscal Studies (IFS) found that women were three times more likely to be part-time workers than men. It also revealed that, not just are part-time workers earning less because of reduced hours, but they are also paid less per hour than people in full-time employment.

For female workers, part-time professionals were paid 32 per cent less per hour than their full-time counterparts. This contributes to the overall gender pay gap because women are so much more likely to be in part-time work than men.

If you take part-time workers out of the statistics, the gap between average men's and women's earnings is much smaller.
There are also concerns that the issue relates far more to the impact of starting a family on a person's career and, in turn, their earnings. Often women are more likely to enter part-time work because they have to balance work and family life, so improving maternity and paternity laws could help lessen the impact on women's wages.

When looking at the gender pay gap, there's also still a certain amount of stereotyping of roles that plays a key factor in the gulf between what men and women earn.

The figures from the IFS found that more men are in senior and managerial jobs and more women work in lower-paid jobs like those in caring and admin.

However, the factors causing this gap are complicated.

Sheila Wild, a former head of age and earnings inequality at the Equality and Human Rights Commission, told the BBC that it's difficult to "disentangle" what is choice and what is "forced choice".

She said: "Most people's selection of their employment is determined by all sorts of things. It's determined by the national labour market - what sorts of jobs are available. It's determined by the local labour market. It's determined by your family circumstances."

However, it appears that women are just as likely to ask for payrises in the workplace, despite a lack of professional assertiveness often being cited as a reason why females have lower earnings.

A study from the University of Wisconsin and the University of Warwick and Cass Business School found “no difference” in the men and women workers when it comes to asking for payrises.

The issue of what will solve the gender pay gap is complicated, and only time will tell whether or not the upcoming legislation will have a positive effect. But it's clear to see that there are many other issues playing their role in the disparagement in earnings.​