This article, originally published in HRnews on 4 April 2019, discusses law and practice around employee salary discussions and their possible role in addressing the gender pay gap.
By: Lucy Lewis
Firm: Lewis Silkin LLP
The Equality Act introduced a law that makes unenforceable contractual provisions, which prevent employees sharing information about pay in order to consider whether there may have been discrimination. It also provides protection against victimisation for people who disclose information about their pay or ask others to share information for the same reason.
This is not the same as a complete freedom to discuss pay. For example, if an employee wants to know what someone else is paid because they are going to join a competitor and have been tasked with gathering useful information, that will not be protected. Similarly, no employee can be required to reveal pay information and, in practice, many people remain reluctant to discuss their pay with their colleagues.
Nonetheless, the change was welcomed by many who thought that greater transparency over pay and bonus arrangements was an important step to closing the pay gap because it would help to identify pay discrepancies which might otherwise have been hidden.
What are the pros and cons and should more people be doing it in order to level the gender pay gap?
It is important to remember that there is no-one size fits all solution to the gender pay gap. Different sectors (and even different geographic locations) face different challenges. What is critical is the extent to which each employer has analysed and understood the reasons for their pay gap and their determination to create a meaningful action plan to address their particular challenges.
For some (particularly STEM companies), that will mean targeting more women to enter their respective professions. Without that, each competing business is essentially ‘fishing in the same pool’ of talent and, without increasing the number of women in the talent pool, the gender pay gap will move between companies as employees move.
Other businesses may identify problems with retaining women at particular points of progression and may need to consider more flexible ways of working or work to encourage men (as well as women) to share caring responsibilities. In each of those cases, an action plan is unlikely to succeed if it is ‘top down’ and so real and meaningful engagement at all levels is required.
Finally, it is important to remember that closing the pay gap in a sustained and lasting way cannot happen overnight. It is important that we move away from expecting immediate results and encourage people to focus less on the numbers/statistics alone and more on holding business to account for the promises that they make to reduce the gender pay gap. By way of example, a STEM business which succeeds in bringing more women into entry level jobs may (in the short term) see a wider pay gap. That is because they will have more women in junior roles and when the pay averages across the business are calculated, that may well result in an increased gap. However, if those women can be progressed into more senior roles over a number of years, it will result in meaningful change which needs to be encouraged and not dismissed by a simple focus on the statistics.
Ius Laboris’ thoughts on the above
Ius Laboris published a gender pay gap map, showing the extent to which reporting (and so greater transparency) is being used as the tool by governments across the world to seek to close the gender pay gap. By clicking on each country, it is possible to see in more detail what the obligations involve, but more graphically, it is obvious that this is a real focus for Western Europe but that there is not the same focus on transparency across the rest of the world.
The online link to the article can be found here.