Firms must reveal bonuses in pay-gap details

Published: Sunday 25th October 2015 by The News Editor

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Firms will be forced to include bonus payments when they publish details of the pay gap between men and women employees, the Government has announced.

The requirement will also be extended to the public sector as part of a fresh push to bring women’s earnings in line with those of men, who on average earn around 19.1% more.

Prime Minister David Cameron, who has described the differential as “a standing rebuke to our country” and said he wants to end it in a generation, said the lack of income equality was denying women opportunities.

Downing Street said it was the first of a number of equality-boosting measures to be set out in the coming days.

More than 10 million workers across the country will be covered by transparency rules affecting outfits with more than 250 employees – legislated for by Labour in 2010 but blocked from implementation by the Conservatives until this year.

Details of exactly what must be published and when the scheme will begin are yet to be announced after a consultation, which followed complaints the data could be misleading.

Downing Street said they would be published “in due course”.

Mr Cameron used his high-profile speech to the Conservative conference to highlight how his own daughters could face gender discrimination over pay, telling delegates: “You can’t have true opportunity without real equality.”

But he has come under pressure from the recently-formed Women’s Equality Party (WEP) to translate commitments into concrete action to close a gap of £245 billion a year between the totals earned by each of the sexes.

Different pay for doing the same or similar work has been outlawed for 40 years and the significant gap in average salaries reflects the lack of women in senior positions and the types of jobs they tend to go into.

WEP leader Sophie Walker said unaffordable child care and employment inflexibility that meant only part-time work suited those looking after children and elderly parents ” adds up not just to a gap in earnings but a gap in power”.

Minister for Women and Equalities Nicky Morgan said the Government also wanted to see women on all boards of FTSE 350 companies – after a target of getting women into at least a quarter of boardroom seats in FTSE100 firms was met.

Lord Davies – who set that target as part of a government-commissioned review – is due to outline final recommendations.

Ms Morgan said: “F rom the opportunities women are given in school to the ability to move up the executive pipeline, we are determined to tackle the barriers to women achieving their all.

“Business has made huge amounts of progress already in recent years – the gender pay gap is the lowest since records began.

“But it should appal us all that, 100 years on from the Suffragette movement, we still don’t have gender equality in every aspect of our society.

“That’s why I’m delighted that we are going further than ever before to ensure true gender equality in the workplace.”

Chartered Management Institute chief executive Ann Francke said: “One of the biggest drivers of gender pay discrepancy, especially at senior levels, is the bonus gap.

“Bonuses are also where gender bias can creep in easily as they are amongst the least transparent forms of pay.

“There’s a tendency to reward those in our own image or to think that because men may be the ‘main breadwinners’ they deserve higher bonuses. And men often negotiate harder or trumpet their achievements more readily.

“The Government’s new reporting legislation is a welcome step forward and will be good news for business. Clearer employee data, improved recruitment and a reinvigorated focus on business culture will help unblock the talent pipeline and support more women to become senior managers and leaders.”

The TUC said the transparency requirement should be put into force without delay, extended to medium-sized firms and backed up with fines for non-compliance.

It wants bosses to be forced to publish plans for closing the gap in their company’s ranks.

General Secretary Frances O’Grady said: “Publishing information on gender pay gaps in salaries and bonuses is a start. But it is just that, a start. Employers need to look at why women are still being paid less than men and do something meaningful about it.

“If the Prime Minister is serious about ending the gender pay gap within a generation he must not delay mandatory pay gap reporting and he should extend the law to medium-size companies as well as large employers. And companies that don’t comply with the law should be fined.

“If the Government really wants to help women workers, it should also stop cutting tax credits and public services that make up a vital part of women’s income.

“It is shocking the UK still has such a large gender pay gap 45 years after the Equal Pay Act and I would urge all women concerned about their pay to join their union, to get their voice heard and their interests represented at work.”

CBI director for employment and skills Neil Carberry said: “Eradicating the gender pay gap is an important goal, but to be truly effective, gender pay gap reporting must be relevant to each company rather than a box-ticking exercise.”

The Times reported that Lord Davies would set an ambitious new target of seeing a quarter of executive director positions at Britain’s biggest companies filled by women by 2020 – and extend the board member target to 30%.

That is seen by campaigners as a “tipping point” beyond which female members are no longer seen as a minority presence.

Among the 100 biggest firms, only six have female chief executives and and 15 of the next-biggest 250 have all-male boards.

Mr Carberry said: “Companies recognise the value of having a diverse board that reflects society and their customers, so we look forward to working with the Government to end all-male boards in the FTSE 350 and elsewhere, building on the successful voluntary approach pioneered by Lord Davies.

“And to continue progress, we need to challenge occupational stereotypes by encouraging more women into male dominated industries and strengthening careers advice.”

Shadow minister for women and equalities Kate Green said: “Labour brought in the Equal Pay Act and legislated for mandatory pay audits and the minimum wage so we are pleased that the government is finally taking some action on the UK’s significant gender pay gap.

“The gender pay gap is still nearly 20% above the European average. Working mothers will bear 70% of the cuts in tax credits thanks to Tory policies, while the introduction of tribunal fees has led to a shocking reduction in the number of pregnancy and sex discrimination cases going to tribunal.

“British women don’t need warm words – we need guaranteed rights at work, properly enforced. Just three weeks ago Tory MEPs voted against requiring companies to publish their gender pay audits.

“It’s not enough to talk about equality, it must run through every piece of legislation.”

Ms Walker said a “much more comprehensive approach” was required including detailed data broken down by ethnicity and disability and extended within three years to firms employing 50 people or more.

“A few simple figures don’t provide a reliable picture,” she said.

“Additionally, a very small number of people actually receive bonuses, which is why our policies address the fact that, at the other end of the spectrum, women are far more likely to occupy low-paid and insecure jobs, and to live in poverty.”

She said the board quotas would lead to the “tokenistic appointment of individual women” and should be replaced by a requirement for all listed companies to have “balanced” boards by 2025.

Published: Sunday 25th October 2015 by The News Editor

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