Bosses required to publish gender pay data

16 December 2014 -

Labour MP Sarah Champion’s bill to make pay information more accessible prevails in Parliament, with just eight voting against it

Jermaine Haughton

MPs have voted in favour of a bill that requires employers to be more transparent about their gender pay gaps and more accountable for wage-related disparities.

Introduced in the Commons this afternoon, a Ten Minute Rule bill from Labour MP Sarah Champion argued that Section 78 of the Equal Pay Act should be fully implemented. Under that section, which has yet to come into force, companies with 250 employees or more would be required to publish staff earnings in a way that would not reveal employees’ names, but would include their genders – a process that would automatically reveal pay gaps.

Champion’s bill passed by 258 votes to just eight.

Supporters of the bill had argued that pay transparency would prove that women are paid less than men for doing the same jobs – regardless of skills and experience – providing a foundation for the issue to be tackled in greater depth.

While the Equal Pay Act has been on the statute books for more than four decades, successive governments have kept Section 78 at arm’s length. In the wake of recent findings from the Chartered Management Institute (CMI) that female workers in management roles would have to work up to the age of 80 to earn as much as their male counterparts, campaigning against the gender pay gap has intensified. For example, Grazia magazine became a key proponent of Champion’s bill, urging readers to get involved and opening an online petition that attracted almost 10,000 signatures.

Salary information is unlikely to be required from employers any more frequently than once a year – but bosses who fail to comply could face civil enforcement procedures or be liable for a criminal offence, punishable by a fine.

CMI has welcomed the discussion that today’s vote has stirred. “MPs are right to debate whether the time has come to require large companies to publish details of how they pay men and women,” said chief executive Ann Francke. “The gender pay gap is still far too wide – especially for older women and among more senior managers – and there’s now widespread support for doing far more. Getting greater transparency from business and publishing pay data is a great way to fix this issue.”

Francke added: “The recent hacking attack on Sony shows the embarrassment that can be caused when a spotlight is suddenly shone on a company’s gender pay gap. Managers would be well advised to pre-empt hackers and legislators alike, and make closing the pay gap a priority in 2015.”

Recent figures by the Commons Library showed that men earned nearly one fifth (19.7%) more than women in 2013, while the Office of National Statistics Annual Survey of Hours and Incomes reports the pay gap between men and women in their twenties has doubled since 2010 – from 2.6% to 5.3%. Furthermore, the disparity has increased for women in their thirties by 0.1% to 12%.

Champion said: “Pay transparency will push companies to focus on the reasons why the pay gap still exists. This isn't about naming and shaming, about telling companies what to do or micromanaging them, it's simply about changing the emphasis.

“Pay transparency places the responsibility on employers to be actively conscious of the law on equal pay and have policies to address the gap.”

Check out this infographic of CMI’s pay-gap research.