UK gender pay gap system will not solve the problem, finds study

The study analysed gender pay gap reporting systems in the UK and Australia, France, Spain, Sweden and South Africa. According to the research, the UK ranks joint last among these countries for the strength of its system.

Researchers scored the countries across 11 indicators, assigning the UK a score of four out of 11 – joint lowest with Australia. Spain, which was ranked top, received a score of 8.5. 

UK employers with 250 or more staff are obliged to report their gender pay gap data annually, but the current legislation does not mandate that those organisations with pay gaps take steps to address them.

However, the study, which also involved interviews with over 80 stakeholders across the six countries, praised the transparency of the UK reporting system, as well as high levels of compliance.

The research findings were published ahead of the deadline for businesses reporting their figures, which was delayed until 5th October after enforcement was suspended in March last year.

There is a need to change the UK system “from a monitoring tool to an action tool”, according to the report. This would bring it into line with the UN Committee on the Elimination of Discrimination Against Women’s recommendation that the UK government encourage employers to take remedial measures to close gaps.

The UK minimum employee threshold of 250 for companies reporting should be lowered, according to the research, which found that it is higher than other countries studied. For example, the cut-off is 50 employees in Spain and 10 in Sweden. 

The research also recommended that the government establishes a legal obligation for companies to publish action plans to tackle their pay gaps and introduces automatic fines for not submitting reports. 

Additionally, the capacity of the Government Equalities Office and Equalities and Human Rights Commission should be expanded to provide better guidance and conduct more rigorous monitoring and analysis of submitted data, according to the study.

Professor Rosie Campbell, director of the Global Institute for Women’s Leadership at King’s College London, said: “At one point, the UK led the field on gender pap reporting – but it’s now falling behind other countries that are going further, faster.

“The transparency that enabled naming and shaming of poorly performing organisations and highlighted success stories was groundbreaking, but other nations are currently doing more, importantly compelling companies to act on identified pay gaps, so they don’t just track the problem but also do something about it.

“This is vital: gender equality is both an urgent economic goal and a moral imperative – one we mustn’t lose sight of in the wake of a pandemic that has disproportionately impacted women.”