Force businesses to spell out plans to end gender pay gap every year, say MPs

Businesses should be made to explain the reasons behind any gender pay gap in their workforce and lay out how they plan to close it, MPs have said.



In a report they say “naming and shaming” companies by forcing them to publish the gulf between men and women’s earnings is not enough, and that annual updates on progress should be provided.

Under the plans floated by the Business, Energy and Industrial Strategy Committee, firms with just 50 employees would also have to publish the stats, a dramatic change from the 250 minimum that was forced from April this year.

Companies should also receive a fine for not submitting accurate figures, they say, adding that there was “no excuse for failure” to do so.

"We recommend that organisations are required to provide some narrative reporting alongside their gender pay statistics and an action plan setting out how pay gaps are being and will be addressed, including objectives and targets," the committee said.

"Subsequent reports should report progress against this action plan, including targets set."

The cross-party group of MPs meanwhile finds that gender pay gaps of over 40% are not uncommon in some sectors and that 78% of organisations reported discrepancies in favour of men.

The committee said the Government should also look at publishing part-time and full-time gender pay stats, to show that the former can expect to be "fairly rewarded and also can reach the top".

"Senior positions should not be the exclusive preserve of those that are prepared to work full time or, as is often the case, far more than full time," they say.

They add that ministers should look at including the pay of partners in firms, the exclusion of which they say makes a “nonsense” of trying to understand the scale of disparities in pay.

Elsewhere their report calls for a consulation on collecting and reporting pay gap data connected to disability and ethnicity, with a view to making it the law by 2020.

REEVES: PAY GAP A MONSTROUS INJUSTICE

Labour MP Rachel Reeves, who chairs the committee, said that while gender pay reporting "has helped to shine a light on how men dominate the highest paid sectors of the economy", the gap must actively close, to end a "monstrous injustice".

She added: "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. 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. Chief executives should have stretching targets in their Key Performance Indicators and be held to account for any failure to deliver. Our report recommends that the Government requires all organisations with over 50 employees to publish annual gender pay gap data from 2020.

“The Prime Minister spoke about the ‘gender pay gap’ as a ‘burning injustice’ and of closing the gap for good within a generation. It’s now time for the Government and businesses to deliver on that ambition.”