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Companies with more than 50 employees could have to report their gender pay gap

on Friday, 10 August 2018.

Companies with more than 50 employees could have to report their gender pay gap

Gender pay gap reporting could be extended to companies with more than 50 employees to try and tackle the UK’s gender pay gap, which is one of the largest in Europe.

Currently only employers with more than 250 staff have to report. However, the Business, Energy and Industrial Strategy Committee recommended in its report on gender pay gap reporting that businesses need to go further to tackle the issue.

The Committee suggested widening the net of companies required to report on their gender pay gap and for businesses to publish action plans and narrative reports on what they are doing to narrow any pay gap.

Rachel Reeves MP, Chair of the Business, Energy and Industrial Strategy Committee, said that its analysis had found that some companies have ‘obscene and entirely unacceptable’ gender pay gaps of more than 40 per cent.

“Transparency on gender pay can only be the first step,” she said. “The gender pay gap must be closed, not only in the interests of fairness and promoting diversity at the highest levels of our business community, but also to improve the country’s economic performance and end a monstrous injustice.”

The report found that, although the median pay gap across the economy is 18 per cent in favour of men, at an organisational level there are some shocking findings, with gaps of more than 40 per cent not uncommon and 13 per cent of employers reporting gaps in favour of men of more than 30 per cent.

Although the first year of pay gap reporting has raised the profile of the issue, the Committee notes that only around half of the UK workforce is covered by the present reporting requirements.

It found that there is evidence to suggest that pay gaps are even higher in smaller businesses, which has led the Committee to call on the government to extend the provisions to firms with more than 50 staff from 2020.

Further, it wants employers to not only report on their pay gap but to also publish an explanation and an action plan for closing the gap, against which they must report progress each year.

“A persistent gender pay gap shows that companies are failing to harness fully the talents of half the population. The penalties of working part-time, both financial and in terms of career progression, are a major cause,” said Reeves. “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.”

View the Committee’s report on Gender Pay Gap Reporting.