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IFS publishes interesting new gender pay gap (“GPG”) data, amid delay in introduction of mandatory employer GPG reporting

13 Sep 2016

New gender pay gap statistics

The IFS report published last month, provides some interesting statistics regarding the GPG in the UK, including that:

  • The pay gap has gone down by 5% in 13 years (23% in 2003);
  • Gender wage gap significantly widens from the late 20s and early 30s;
  • Before the arrival of a woman’s first child, the hourly wage gap is 10% on average;
  • By the time the first child is 12, the average hourly wage gap has widened to 33%;
  • The only clear evidence of continued falls in gender wage gap is for lowest-educated individuals;
  • The wage gap decreases by 3% in respect of women who work more than 20 hours per week;
  • On average, women are in paid work for four years less than men, and this lower ‘human capital’ of accumulated experience makes it harder for women to command higher wages in the long term.

The report indicates that progress in reducing the GPG has been weak in respect of the highly educated, and that a large driver for pay disparity is the increased time women spend away from the workplace, and the feeble pay progression of those who return to reduced working hours (particularly less than 20 hours per week).

The statistics are likely to assist organisations seeking to analyse and understand their own GPG data, ahead of the introduction of mandatory reporting (see below). It should also assist in identifying what proactive steps might be taken to reduce any pay gap identified. Steps might include a greater focus on review processes, to ensure pay progression and career development for women whose return to work coincides with a move to part time hours.

You can view the full IFS report here.

Gender Pay Gap Regulations

The IFS data followed hot on the heels of the Government Equalities Office’s (“GEO”) announcement that the final draft of the Equality Act 2010 (Gender Pay Gap Information) Regulations 2016 will be published “in due course”, not during this Summer as had been previously indicated.

Anticipating criticism over the delay, the Government has said that it remains committed to the introduction of the reporting obligations.  The GEO now envisages that the Regulations will be laid before Parliament in autumn 2016 ready for introduction the following April.

Given the Government’s renewed commitment, the delay should not serve to distract organisations from carrying out their internal preparations for the introduction of GPG reporting, which still remains likely to come in to force during 2017. Businesses with over 250 staff will be expected to publish their gender pay gap from April 2018.

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