Small businesses dispute extension to gender pay reporting

22 October 2019

The Telegraph reports that the Federation of Small Businesses has opposed the chief economist at the Bank of England’s assertion that gender pay reporting should be extended. At present, gender pay gap reporting is compulsory for businesses that employ more than 250 staff, but the new recommendation is that this is extended to include companies engaging 30 employees or above.

The chairman of the Federation of Small Businesses, Mike Cherry voiced his support for endorsing gender equality but admonished that there is “very limited statistical value” in publishing pay gaps in small teams where individuals are unlikely to hold similar job titles and duties to that of their colleagues. He also warned that there would be “a number of practical barriers, not least where confidentiality is concerned.”

Andy Haldane, speaking on behalf of the Bank’s Monetary Policy Committee, supports the new proposition and pledged support for reporting into ethnicity pay gaps. He did also refer to the negative effect that such reporting could have on businesses as the positive step of hiring younger, lower-paid workers could skew pay gap reports in a negative light.

Evidence has revealed that the gender pay gap has shrunk by half over the last 25 years but was still prevalent with approximately ten percentage points observed. Pay gaps between ethnic minorities are also in existence with varying degrees of pay disparity between different ethnic groups.

Government guidance, published in January 2019, in response to the Business, Energy & Industrial Strategy (BEIS) committee’s recommendations, asserted that gender pay gap reporting could be “particularly burdensome for small and medium-sized businesses and so the requirement should be restricted to large employers”. There was no stipulation or discussion of plans to extend gender pay gap reporting to organisations employing less than 250 staff but there was mention of the fact that the government does encourage small and medium-sized businesses to review their gender pay gaps and that some had voluntarily published their data.

 


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