Employers complacent about gender pay gap

March 31 2003 - Most employers do not intend to check that they are paying women fairly, despite the fact that the gap between women's and men's average full-time pay is still 19% per hour. And part-time women workers earn 41% less per hour than full-time male employees - exactly the same gap as 25 years ago.

This is the conclusion of research, carried out for the Equal Opportunities Commission (EOC) by Fiona Neathey, Sally Dench and Louise Thomson of the Institute for Employment Studies. Their report also shows widespread secrecy about pay, with more than a fifth of employers (22%) not allowing their employees to share information about their pay with colleagues.

Julie Mellor, Chair of the EOC, said that complacency and secrecy were threatening to halt progress on equal pay and urged all employers to review their pay systems for bias.

It is two years since the EOC Equal Pay Taskforce's recommended that all employers should review their pay systems to check they were not biased against women. That call was backed by the Government.

But the Institute for Employment Studies research shows that just 18% of large employers and 10% of medium-sized employers have actually done a pay review or are in the process of doing one. The majority (54% of large and 67% of medium-sized employers) are not plannning to do a pay review at all.

Julie Mellor, Chair of the EOC, said:

"The level of complacency and secrecy this research has uncovered is staggering. Employers have a crucial role to play in tackling unequal pay. Although some have accepted that responsibility willingly, many others still don't seem to have got the message.

"Employers now have no excuse for inaction. The EOC has provided a range of tools to help employers, including the Small Business Kit we are launching today, and the research shows that the majority of those who have done a pay review did not find it difficult. It also found that wanting to be a good practice employer was a key motivation for doing a review - I am confident that their commitment to equality will help those employers attract and retain the best people for their organisation."

Patricia Hewitt, Secretary of State for Trade and Industry and Minister for Women said:

"This research reveals a depressing snapshot that shows too many workplaces are still stacked against women fulfilling their true earning potential. But it also makes me more determined to keep on working with the EOC, employers and unions to close the pay gap.

"We are encouraging all companies to carry out pay audits and to make use of the practical help available, like today's tool kit for small business. From April, the equal pay questionnaire will help employees get more information about comparative pay.

"Businesses should not be afraid of pay audits, because treating - and paying - men and women equally can only improve a company's performance in the long run.

"It is encouraging that over a third of large companies will have done a pay review by the end of the year. However, together with the EOC, we will continue to monitor the take up of pay reviews to see what can be done to increase numbers."

Ms Mellor went on:

"Pay is still a taboo subject in many organisations. British employers have to tackle this culture of secrecy if we are ever going to see the gap between women's and men's pay finally closed. Pay discrimination could not survive in a climate of greater openness about pay."

Key research findings:

Only 18% of large employers and 10% of medium-sized employers have actually done a pay review or are in the process of doing so.

The majority of employers have no plans to conduct a review at all (54% of large and 67% of medium sized employers).

Over a fifth of employers (22%) do not allow employees to share information about their pay with a colleague.

The majority of larger employers considered that they had arrangements in place to ensure that women and men received equal pay. However, they were often limited in scope.

Many employers felt it was sufficient that pay was linked to the job, responsibilities or performance, rather than to gender, and two-fifths or organisations had no plans to monitor the relative pay of women and men.

Those organisations that had conducted, or were conducting an equal pay review were generally positive about the experience.

Where pay gaps were found these were often quite substantial. The lowest organisational pay gap was 5% and the highest was 40%.

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