Large companies will soon be required to publish what they pay male and female employees, under new rules to be announced by Prime Minister David Cameron today as part of a commitment to “end the gender pay gap in a generation”.
The rules will apply to companies with more than 250 workers.
A consultation with business groups is being launched by minister for women and equalities Nicky Morgan to discuss the details of the policy.
Cameron also said that the recently announced new minimum wage bracket, which will take the rate for over-25s up to £9 an hour by 2020, would “primarily help women, who tend to be in lower paid jobs”.
“It will help close the gender pay gap. But we need to go further, and that’s why introducing gender pay audits is so important,” he said, writing in the Times today. He hopes the rules on reporting pay “will cast sunlight on the discrepancies and create the pressure we need for change, driving women’s wages up”.
The proposed regulations will implement Section 78 of the Equality Act 2010, which was originally put in place by Labour.
Analysis from the Treasury shows that 65 per cent of winners from the minimum wage hike are expected to be women.
The gender pay gap is currently 19.1 per cent, which means a woman earns on average 80p for every £1 earned by a man.
The policy is expected to come into force in the first half of next year.
Some groups have criticised the move as being too simplistic a method to deal with a complex issue.
“Not all companies will cheer the introduction of compulsory gender pay gap reporting, because it takes a complex set of issues and reduces it to a few headline statistics,” said Adam Marshall, executive director of external affairs and policy at the British Chambers of Commerce, which represents 52 chambers of commerce across the UK.
“It’s a sad state of affairs when even the Prime Minister is promoting the gender pay gap myth. According to the Office for National Statistics, women between the ages of 22-39 working more than 30 hours a week earn, on average, more than their male counterparts,” said Kate Andrews from free-market think tank the Adam Smith Institute.
“Education, previous experiences, negotiating tactics, and unique abilities all contribute to one’s salary, none of which can be known by comparing John and Jane’s annual take-home pay on a spreadsheet.”