The Gender Pay Gap Solution - Evolution Financial Planning

Do we finally have a solution to the gender pay gap? How is it working and what is changing?

The difference between salaries of men and women doing the same role has always been a difficult subject. There has always been a gap and women are fighting for this to change. The Government has just stated that large companies will in the future have to publish details of pay for men and women.

So, what is the gap and what is changing for the future?

What is the gender pay gap?

This is the difference in the average salary between men and women. According to the Government at present, it is 19.1%, so men earn £1 for every 80p that women will earn. So, the average hourly pay that women get is approximately 20% less than men. This is based on both full and part time work.

The Office of National Statistics state from their November 2014 survey, that the gap is actually 9.4% based on full time hours excluding overtime.

They say that in regards to part time work, this is reversed and it is actually women that earn more, 5%, however this can be explained by the fact that women tend to work part time throughout their working life whereas men may only work part time at the beginning or end of their careers.

Why do women earn less?

There are several reasons why women tend to earn less than men:

  • There are more women in lower paid jobs such as healthcare, where it is found that average wages are £40 less a week than the national average. This is where 80% of the workforce are women.
  • It is also noted that there are fewer women managers, and when they do get to management, they are paid less than their male counterparts.
  • The majority of women work in childcare – 94% and secretarial – 92%, however, only 7% are engineers and 20% are architects which are much higher paid positions.
  • Also when weekly pay rates were researched the gap was even bigger because men tend to work longer hours than women, more likely to do overtime and get paid bigger bonuses.

The gap differs in different industries when the research looked at average earnings:

  • It found that in transportation, mining, storage and quarrying sectors, women earn on average around 3% more than men.
  • In finance, insurance, technical, scientific and utilities, men earn significantly more than women, on average around 27%.

So what does the law actually say?

It has actually been against the law to pay someone a different rate for the same job based on their gender since 1970 when the Equal Pay Act came in. Also, since 2010 it is also against the law to pay someone a different rate for a job that is relatively the same, or seen as the same value or equivalent grade, which comes from the Equality Act.

The challenge that arises with this is that there are many arguments about whether one job is the same or equivalent to another instead of concentrating on whether women are actually being paid the same as men for the same job.

Only 2 out of 5 companies had analysed their own salary data and fewer than a third had carried out a gender pay gap review (ONS).

So what’s new now?

The new change which the coalition government never put into place as part of the Equality Act; but now the new government has decided to; is that companies will have to publish details on their salaries and carry out equal pay audits.

So any company that employs 250 or more people, whether it is in the private or voluntary sectors, will have to publish their salaries. It is still yet to be decided on how these will be split down for example into just an overall figure or averages for full and part time work or even broken down by pay grade or individual job.

What can I do if I think I’m being paid less?

You are able to take your case to an employment tribunal. If you decide to do this, you must in advance notify ACAS, who are the Advisory Conciliation and Arbitration Service. They operate a free mediation service. Employers who are found to be discriminating through pay may have to complete an audit as well as giving out compensation.

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