The UK's pay gap experiment: Force employers to publish pay disparities
- The U.K. found a way to urge employers to close the gender-based pay gap: require them by law to post pay disparities publicly. Public- and private-sector employers with at least 250 workers must publish their gender pay gap data on their websites and the government's under The Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 and The Equality Act 2010 (Specific Duties and Public Authorities) Regulations 2017. Pay includes base wages and bonuses. April 6 was the required posting date.
- The New Republic reports that the U.K.'s policy uncovered massive pay inequities: 78% of employers in Great Britain pay men more than women doing the same work. But some observers, like Harvard economist Claudia Goldin, questioned whether the mandated postings took into account factors that could legitimately explain pay disparities, such as education, experience and hours worked. Some British employers reportedly weren't posting accurate data, with others putting in zeros where actual figures belonged just to meet the posting deadline, according to the New Republic.
- One columnist for The Guardian agrees that employers can manipulate and omit data, but calls U.K.'s posting requirement a naming and shaming process that's a welcome attempt at closing the gender-based wage gap. The column also points out the complexities involved in explaining why pay gaps persist, but says that employers should examine how many women they're promoting to high-level, high-paying positions and whether they're considering a broad base of candidates when jobs open up.
Company transparency and authenticity should be the aim of companies trying to establish a strong brand — and the new U.K. law uses that to its advantage. Pay-gap posting is a "naming and shaming" process that could arm potential candidates with knowledge that may drive them to opt for jobs elsewhere.
This U.K. experiment is not the only legislative attempt at closing the pay gap. Several U.S. states and cities have passed salary history bans that block employers from asking about past pay rates or using past rates to set future compensation. The argument is that such bans allow women and people of color to overcome a past of being paid less than their white male counterparts for the same work, jumpstarting their ability to close the pay gap.
The pay gap appears starkly real. When comparing men and women with equal education, with the same college majors working in the same occupation, women still earn only 92 cents for every dollar earned by men, according to a recent Georgetown University report. HR leaders can work with managers to set wages and audit pay practices, flagging disparities and readjusting wages based on regional labor-market rates. Data analysis plays a huge role in getting this right, though employment lawyers suggest bringing in outside counsel to complete such audits to maintain privilege.
Employment experts say the pay gap will take decades to close. In fact, one principle behind Equal Pay Day is to determine how many days a woman would need to work into the next year to earn as much as her male counterparts did in the year before. Notable, some employers like Salesforce, Adobe, Citigroup and Starbuck's are actively closing wage disparities in their organizations, proving that it can be done (though many of them were prompted to do so due in part to activist investors taking an interest in their disparities).
- Equal Pay Portal Gender pay gap reporting
- New Republic What the U.S. Can Learn from Britain on Equal Pay
- The Guardian UK's gender pay rankings will put discrimination under spotlight