Measures contained in the final draft of new Regulations on gender pay gap reporting due to come into force in April 2017 are described as ‘blunt’ by at least one large consultant.
Mercer commented that, although the latest and final draft of the regulations brings ‘much needed clarity’, the measure that organisations will use to report on pay by gender provides little insight into whether men and women are paid the same for the same work.
Chris Charman, reward expert at Mercer said:
‘Employers will need to demonstrate for themselves that they are paying fairly and that the gap is not down to unequal pay.’
This view is echoed by Suzanne Horne, partner at Paul Hastings LLP:
‘The approach remains fundamentally flawed as an over-simplification of a complex issue. They [the Regulations] fail to take adequate account of a number of variables and additional factors.’
Ben Willmott, head of public policy for the CIPD, responding to the publication of the final Regulations said:
‘These regulations are a positive step towards greater transparency and will ensure organisations will generate the data needed to shine a light on gender pay gaps where they exist.’
However, he adds that it will be just as important for employers to understand the reasons behind any gender pay differences, which are likely to be the result of a number of factors.
The reporting Regulations were welcomed by the Chartered Management Institute, which hailed them as a ‘big boost to productivity’. Ann Francke, the CMI’s chief executive, said:
‘Too many organisations resemble a glass pyramid, with the majority of entry-level roles filled by women, and the number of women reducing the higher up you go.’