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Equal Pay

by Demi Inglis, Modern Apprentice at City of Glasgow College

Introduction

Men and women of all different races or cultures, in the same employment, performing equal work must receive equal pay, as set out in the Equal Pay Act 1970 but this law had to be re-enforced in 2010 as no significant changes had been seen. Employers have a legal obligation to ensure that all employees are compensated fairly and independently of any protected characteristics, such as gender. Equal pay applies not only to basic pay, but to all contractual terms and conditions of employment, such as overtime rates, holiday entitlement, bonuses, pay and reward schemes, pension payments, non-monetary terms, annual leave entitlements and any other benefits promised by the company or employer.

Following a number of high-profile legal challenges regarding unequal pay, the UK Government has responded with a legal mandate for all public sector organizations, and large private sector employers, to publish data relating to equal pay on a publicly accessible database.  However, the issue of unequal pay is by no means limited to the UK, indeed pay inequality is prevalent across the EU. A recent pan-European survey indicated that only 26% of Europeans are aware of the legal guarantee of equal pay for equal work in their country and 51% of Europeans think there is no pay discrimination within their country. Whilst 48% of responders indicated they were comfortable with negotiating their salary, evidence has shown that women are less likely to negotiate their salary than men, thus reinforcing the gender pay gap. Perhaps the most high-profile example of coordinated action is found in Iceland whereby women collectively engage in a walk-out protest on November 10th, known as ‘Equal Pay Day’, to mark the day when they essentially start working for free.  This is repeated in France, with a number of other countries now following suit.

Before Gender Pay Gap reporting was introduced in the UK, many companies forbid employees from openly discussing or sharing compensation structures and agreements.  This disproportionately affected women who were unable to negotiate comparative compensation to male colleagues as they were unaware of any potential pay differential between colleagues doing similar or equivalent work.

Despite high profile campaigns designed to raise awareness of unequal pay is, the rate of progress towards equality is glacial.  A recent survey indicated that whilst 90% of Europeans thought that it was unacceptable that women were paid less for the same job as men, 51% of respondents thought there was no pay discrimination in their company.  This serves to highlight the hidden nature of unequal pay and the barriers associated with making meaningful progress.

The inclination to reduce equal pay to a simple monetary transaction between employer and employee fails to recognize the wider impact of lower pay on both financial equity and quality of life.  Financial inequality has been shown to directly impact on mental health, absenteeism and retention, and in-turn reduces employee well-being and productivity.

In short, the legal, business and moral case for equal pay is compelling and progressive companies seeking to support the development of a diverse, inclusive and highly productive workforce are reaping the benefits of transparent equal pay policies.

Occupational Segregation

Occupational segregation in educational fields like mathematics, computing and engineering remains a key contributing factor to the disproportional representation of women in the STEM labor market. Consequently, there are fewer women employed in well paid scientific and technical jobs and more women employed in lower valued and lower paid sectors of the economy. This effect can even be realized within individual companies with women more likely to work in office based, clerical and administrative roles than in technical positions within laboratories, workshops and manufacturing plants. The proportional representation of women at senior, executive and board level is also significantly lower than male representation in these roles.

Measuring pay gap by the salary paid to male and female employees in similar or the same roles does not provide an accurate indication of the overall inequality between men and women.

Many women face barriers to employment due to caring and childcare responsibilities and associated challenges with accessing affordable childcare. This results in significantly higher proportion of women in part-time employment in comparison to 89.1% of men who are in full time–work.

In 2014 the European Commission set out to strengthen the principle of equal pay between men and women, aiming to assist EU countries to find the right approach to ending pay inequality and the gender pay gap. In France the Government has introduced legislation requiring large companies (with 300+ employees) to negotiate an action plan and smaller firms (with 50+ employees) to define an action plan and send it to state services. In the UK the Government is calling on companies to:

  • Improve the pipeline to ensure progress on female representation at senior levels, including supporting women to progress to middle management and offering return to work schemes.
  • Publish their gender pay gap data, including companies with fewer than 250 employees.
  • Make flexible working a reality for all employees by advertising all jobs as flexible unless there are solid business reasons not to.
 Problems
  • Findings found that the women with lower income than men doing the same job had a nearly 2.5 times higher risk of depression;
  • The likelihood of anxiety for women is four times higher than that of male counterparts;
  • Parenting and caring responsibilities have a detrimental impact on pay. Working mothers are paid less on average than women with no caring responsibilities, who in turn are paid less than men;
  • Pay discrimination is disproportionately experienced by women of colour (BAME), but is clearly identifiable for women of all races and cultures.
Actions
  • Clearly identify a salary range in recruitment adverts to ensure applicants know what they should reasonably expect to be paid, without having to negotiate;
  • Make promotion, pay and reward processes clear to the applicant to ensure decisions are objective and evidence based and clearly understood by employer and employee;
  • Promote and support shared parental leave to ensure women are not disproportionately impacted by caring responsibilities;
  • Implement a ‘Pay Transparency’ to ensure employees know what colleagues in the same, or similar, roles are earning.

*This is the first of a two part series written by Demi Inglis. Demi is a Modern Apprentice in Business Administration at City of Glasgow College

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