19:13, August 01 40 0 theguardian.com

2018-08-01 19:13:05
Smaller firms should have to report gender pay gap, MPs say

The government should force medium-sized companies to reveal their gender pay gaps and push for larger law firms to include partner pay, a group of MPs recommended on Wednesday.

All companies with more than 50 employees should have to report their gender pay gap from 2020, said the business, energy and industrial strategy committee. Currently only firms with more than 250 employees have to report their gender pay gap, leaving half of the UK workforce without knowledge of their workplace’s gap.

The committee said the government had to take fresh action to close the gap, and should force companies to publish action plans and narrative reports about what they were doing to narrow it.

It also criticised the government for “failing to clarify the legal sanctions available to the EHRC to pursue those failing to comply and we recommend that the government rectifies this error at the next opportunity”.

The report states: “The new reporting regime is a step forward, but its full potential has not yet been realised. We are calling for the government to be more ambitious.”

Rachel Reeves MP, chair of the BEIS committee, said its analysis of gender pay gap reporting, which saw companies report for the first time in April had found “obscene and entirely unacceptable gender pay gaps of more than 40%”.

Among the worst offenders for were: Ryanair (71.8%), JP Morgan (64%), Capita Resourcing Limited (50.8%), Clarins (UK) Limited (49%), Merrill Lynch International (46.7%), EasyJet (45.5%), Sainsbury’s Bank (45.3%), British Gas (44.1%), Barclays Bank (43.5%), and Specsavers (41.9%).

“It is 48 years since the Equal Pay Act and the gender pay gap reporting requirement has shown that we still have a long way to go until women’s work is valued as much as men’s,” she said.

Companies were failing to fully harness the talents of half of the population, with penalties for working part-time a major part of the issue, she said.

“Companies need to take a lead. For example, why aren’t they offering flexible working at senior levels? They must look at why they have a pay gap, and then determine the right initiatives, policies and practices to close it.”

Reeves said some companies’ decision not to include partner pay in their gender pay gap reports “made a mockery of the system”. She added that the committee had written to the “magic circle” of London-based major law firms about the issue, and only Allen & Overy had refused to provide updated figures.

The Government Equalities Office said it was publishing new guidance for companies to help them improve the recruitment and progression of women and close their gender pay gap.

The minister for women and equalities, Penny Mordaunt, said the report set out some of the challenges and scale of the issue. “It is appalling that, in the 21st century, there is still a big difference between the average earnings of men and women,” she said.

“We need to take action to ensure businesses know how they can make best use of their best talent and make their gender pay gaps a thing of the past.”

Sam Smethers, the chief executive of the Fawcett Society, welcomed the recommendation to include medium-sized companies.

“We have to move on from simply reporting the pay gap, to taking action to close it,” she said. “That’s why we are glad that the committee agrees with Fawcett that companies should be required to publish and report on a plan, as well as providing data.”

Laura Hinton, chief people officer at PwC, who gave evidence to the committee said companies needed to move away from being viewed as a compliance issue to reporting that required action. “Without robust action plans and greater accountability, we are unlikely to see the gender pay gap reduce significantly any time soon,” she said. “Creating an inclusive culture, where flexibility is embraced by all and leaders are responsible for setting a clear tone from the top, is the vital ingredient in driving action.”

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