Gender pay gap still hidden for small businesses

posted by 4 years ago in News

There’s concern that the true extent of gender inequality over pay in UK small and medium sized businesses will not be revealed despite being exposed for companies with more than 250 employees.

New legislation, brought into force in 2018, will require larger companies and voluntary organisations to reveal the number of men and women in each pay range to show where their gaps are the widest. Both salary and bonuses will be taken into account. It’s currently illegal to pay men and women a different wage for doing the same job under the Equal Pay Act.

However, the new legislation, designed to expose companies who are not paying employees fairly and make positive examples of those who are closing the gender pay gap, fails to include our country’s SMEs meaning that two thirds of the UK workforce will be excluded from the measures. This is despite similar laws being applied to businesses with fewer employees in Austria (150), Italy (100) and Finland (30).

Head of Businesscomparison.com, Philip Brennan says it’s an issue that needs addressing across the board – not just in larger firms,

“Whilst I understand the paperwork demands that small business owners already have on them I think it’s important that they should be included in this new legislation. Smaller businesses have fewer employees to publish the figures for. There’s a large difference between a micro business employing just a handful of staff and a medium sized firm employing nearly 250. In the case of the latter there should be regulation to ensure that all staff are paid fairly.”

Office for National Statistics figures suggest that the pay gap between men and women for full and part-time workers in the UK currently stands at 19.2 per cent. This means a woman on average earns around 80p for every £1 earned by a man.

The monitoring was originally due to start this year however around 8,000 larger firms have been given time to address any inequality before their data will appear on a league table in 2018.