On Friday 18 September 2020, we mark the first International Equal Pay Day, intended to recognise the continued efforts towards achieving equal pay for work of equal value. Incidentally, 2020 also marks 50 years since the introduction of the Equal Pay Act in the UK, an Act passed in 1970 at a time when women in the UK were earning on average almost 40% less than their male counterparts. The Equal Pay Act prohibited employers from paying women less than men for the same job. Whilst unequal pay has been unlawful since the introduction of the Act, the gap between pay for men and women persists today.
What are the challenges going forward in terms of the gender pay gap and how has Coronavirus impacted upon this?
The right to equal pay, meaning that men and women who perform equal work for the same employer must receive equal reward, is now enshrined in the Equality Act 2010 (which replaced the Equal Pay Act 1970). Equal pay applies to all terms and conditions of employment, including pension, performance related pay and benefits.
Gender pay gap statistics – which calculate the percentage difference between the average hourly earnings for men and women – currently suggest that women globally earn an average of 23% less than men. While the existence of a gender pay gap in an organisation does not indicate that there has been any unlawful pay discrimination (because gender pay gap statistics are based on averages rather than comparing individual workers), it is a useful tool for flagging up where potential problems may lie.
Although progress in narrowing the gender pay gap over the last several decades has certainly been made, that progress appears to have slowed in recent years. The gender pay gap amongst all UK employees (both full-time and part-time) fell just half a percent from 17.8% in 2018 to 17.3% in 2019.
The reasons why the global pay gap has reduced over the past 50 years are multifaceted and include cultural shifts, anti-discrimination legislation, influence from workers’ organisations and mandatory reporting regulations. One example of the latter issue was the introduction of mandatory gender pay gap reporting in the UK. From 2017, any organisation with 250 or more employees has been required to publish their gender pay gap data and a written statement on their website, as well as reporting their data to the government.
The BBC’s reporting of the pay of their highest paid presenters in 2017 (which it was required to do as part of its new royal charter) revealed that two-thirds of those earning more than £150,000 annually – and all of the top seven earners – were male. The public backlash was swift, and the high-profile disputes of Samira Ahmed and Carrie Gracie were publicly damaging to the organisation, which committed to wide ranging pay reviews in an effort to achieve equality between men and women on air. Interestingly, the BBC’s release of the same data this week indicates that strides appear to have been made, at least in relation to this particular group, with previously highest earning presenter Gary Lineker agreeing a 23% pay cut and presenter Zoe Ball receiving a significant pay increase, which now makes her the highest paid presenter at the organisation.
The mandatory public release of gender pay gap data has shone a much-needed light on gender pay issues, the impact of which will, hopefully, begin to show in the coming years. It is, therefore, disappointing that as a result of the Coronavirus outbreak, the decision was made to suspend the legal requirement for businesses to publish their data this reporting year. While the decision would have been welcomed by many employers, it was announced so close to the publication deadline that most of the work must already have been done by many employers in readiness for publication. This loss of momentum is even more unsatisfactory in circumstances where data published across the board strongly supports the contention that women have been, and continue to be, disproportionately disadvantaged in the workplace as a result of the Coronavirus pandemic, for reasons including the fact that women are more likely to bear the burden of additional caring responsibilities as well as the fact that a large proportion of employees in the heavily impacted service sector are female.
The decision to suspend the requirement for gender pay reporting this year also casts doubt on the capacity to accurately measure the true impact of COVID-19 on women in employment this year, as it removes an important benchmark. It also potentially stalls momentum for the introduction of mandatory ethnicity and disability pay gap reporting, which many observers have been anticipating for the past several years. Given that a 2019 report from the Office of National Statistics (ONS) found that ethnic minority employees in London earn an average of 21% less than white employees, this is clearly another area where transparent reporting and scrutiny is long overdue.
We should all hope that further progress towards equality will have been made by the next International Equal Pay Day in 2021.
Our firm has extensive experience in advising both employees and employers on issues of discrimination and equal pay. If you would like to discuss any of these issues further, or for guidance on your specific rights, responsibilities and potential liabilities, please contact Beth Hale (Partner) and Louise O’Connor (Associate), both of whom specialise in partnership and employment law issues for multi-national employers, senior executives, firms and partners.