Equality Bill: More red tape for employers

April 27, 2009

Equality Bill: More red tape for employers

The Equality Bill, published today, will require employers with more than 250 staff to report on their gender pay gap from 2013.

The Bill, which aims to narrow the gender pay gap, as well as tackle discrimination in all its forms, replaces nine major pieces of legislation and around 100 other measures to form a single Act which makes it easier for employers and individuals to understand their legal rights and obligations.

Women are still paid on average 23% less per hour than men, so the Bill, expected to come into force in the autumn of 2010, aims to tackle this by requiring businesses to report on gender pay.

Minister for Women and Equality Harriet Harman, who published the Bill, said it will make Britain a more equal place, and help us build a stronger economy and fairer society for the future.

“We will shine the spotlight in every workplace on the hidden pay discrimination against women. We will let employers have the right to choose to diversify their team – with positive action. And we will end the last lawful discrimination – which is against older people.”

Vera Baird, the minister who is taking the Equality Bill through the House, said: “Employers will no longer be able to rely on keeping their pay structure secret. We will ban secrecy clauses in employment contracts, so that women can challenge unfair pay. And we will encourage businesses to report on gender pay, but let us make no mistake: if voluntary measures do not work, we will take stronger measures to ensure equal pay for women.”

In response to the Bill, Charles Cotton, reward adviser at the Chartered Institute of Personnel and Development (CIPD), said that gender pay reporting is not the answer to the gender pay gap.

“It is in the interests of business for the gender pay gap that does exist to be tackled. But it is dishonest of policy makers to imply that it can be solved by some magic bullet aimed at employers. Voluntary pay reporting, with the big stick of compulsory reporting looming in 2013, will do little more than create bureaucracy and fuel employment law claims.”

Sandra Wallace, employment law partner at DLA Piper, echoed these views: “Compulsory gender pay audits come as a costly and unwelcome surprise for businesses that are currently struggling under the weight of the recession. While it is clear that pay-bias towards men needs to be addressed, companies will now have to make significant financial and legal adjustments to comply with the new regulations.”

Wallace added: “With so many businesses currently trying to keep costs down, there is a real danger that the gender pay gap will be addressed by paying men less and that cuts will be made elsewhere, with equality issues such as the under-representation of other minority groups being sidelined.”

However, speaking about the Bill at the British Chambers of Commerce Annual Convention in Birmingham today, Shriti Vadera, minister for economic competitiveness and small business, said that businesses don’t need to worry about gender pay reporting yet: “I would like to clarify that [the Equality Bill] allows us to require companies to report on gender pay gaps only after 2013, so you don’t have to be distracted by it now, and only if we find voluntary arrangements are not working.”

The Equality Bill will: