Firms will be required to publish average pay by gender but there are concerns the move, intended to ensure men and women are paid equally, could backfire.
Sandra Wallace, employment law partner at DLA Piper, says the regulations would heap unnecessary financial, administrative and legal burdens on businesses.
Wallace says: “The government claims the bill will cost the private sector a one-off £211m and recurring costs of £11m to £17m per year for additional court and tribunal cases and compensation awards. However, the true cost will be far higher if companies address the gender pay gap by paying women more or use litigation to demonstrate that there are reasons unrelated to gender which account for pay differences. “But with so many businesses currently trying to keep costs down, there is a real danger that the gender pay gap will be addressed by paying men less and that cuts will be made elsewhere, with equality issues such as the under-representation of other minority groups being sidelined.” CBI director of HR policy Katja Hall says the organisation supports the clarity and simplification the Equality Bill achieves but is concerned about the consequences of publishing gender pay.
“Companies that have too few women in higher paid roles, and are trying to attract more, could be forced to publish a statistic that would deter female applicants and compound the problem,” Hall says.
“The gender pay gap can be misinterpreted. It does not compare men and women doing the same job. It reflects the fact that fewer women have higher paid jobs and the way to address that is not by comparing misleading average pay rates, but by improving opportunities for women via better childcare and careers advice.”