Gender pay gap reporting: will my SME have to publish salaries?

A group of MPs is calling for organisations with more than 50 employees to publish salaries in an attempt to close the gender pay gap. Coodes Solicitors Employment Lawyer Philip Sayers comments on the proposals and what it means for SMEs.

Women on the UK are paid an average of 18% less than their male counterparts. According to Government statistics, gender pay gaps of more than 40% are not uncommon in some sectors and 78% of organisations report gender pay gaps in favour of men.

Which businesses does the law require to report on pay?

The law currently says that employers with 250 or more staff must publish data each year to show the salaries of their male and female employees. However, this only covers around half of the UK’s workforce. There is now a call for that reporting to be extended to businesses with a minimum of 50 employees. The aim is for greater transparency to begin to close the gap.

A call for SMEs to carry out gender pay gap reporting

In its report on gender pay gap reporting, the Business, Energy and Industrial Strategy Committee recommends increasing the number of businesses that have to report on pay. In addition to recommending the law is widened to include businesses of 50 or more employees, the report calls for organisations to publish the following:

• An explanation of any gender pay gap
• An action plan for closing the gap

Employers would then be required to report on progress each year.

The report makes a number of other recommendations, including calling for clarification on the way in which pay to equity partners is reported.

What happens next?

The Business, Energy and Industrial Strategy Committee has advised that the threshold is changed to include organisations with a minimum of 50 employees from 2020. The next stage is for the Government to respond to the Committee’s recommendations, with feedback expected in the next few weeks.

What should I do now to prepare for proposed changes to gender pay gap reporting?

The law on reporting on pay remains the same for now, and any change will not come into force until 2020. However, all employers should take this opportunity to review their own salaries and identify any potential issues with pay. For more advice on how employers should deal with the issue of the gender pay gap, please see my previous blog.

For more information on this or any Employment enquiries contact Philip Sayers, Employment team, Coodes Solicitors on 01872 246200 or philip.sayers@coodes.co.uk