Gender Pay Gap Contents

Conclusions and recommendations

Understanding the gender pay gap

1.Paying men and women differently for the same, or equivalent, roles has been illegal since 1975. Discrimination on the grounds of age or gender is also prohibited. There are clear legal remedies to both these issues. The question of whether employment tribunal fees are having an impact on workplace culture was raised during this inquiry. Our colleagues on the Justice Committee are currently investigating this issue. We await their findings on the appropriate levels of fees for employment tribunals with interest. (Paragraph 44)

2.The causes of the gender pay gap are complex and varied. Direct discrimination plays a part in women’s lower wages, particularly for older women who entered the labour market on less equal terms to men and who may face dual discrimination on the grounds of age and gender. However, structural factors are the key cause of the gender pay gap. These include occupational segregation; the part-time pay penalty; women’s disproportionate responsibility for unpaid caring; and women’s concentration in low-paid, highly feminised sectors. (Paragraph 45)

3.We welcome Government action on better careers education for girls; increasing the number of women on boards; and supporting more women into senior roles. However, not enough is being done in the following key areas:

4.There is strong evidence of the economic and productivity benefits of tackling the gender pay gap. The best organisations recognise this and are taking steps to offer flexible working and improve job design to attract and retain talent. However, the productivity case for reducing the gender pay gap has not been made strongly enough to all employers across the UK. The Government, business, trade bodies, unions and public sector organisations must work to move the discussion about the gender pay gap beyond one of equality, to one of economic necessity. Government must also take action to lead by this example, by ensuring tackling the causes of the gender pay gap is a priority for all public services. (Paragraph 71)

The case for flexibility

5.Flexible working is high on the list of priorities for millenials and employers are beginning to recognise it can help them improve productivity as well as attract and retain talent. These changes to the workplace can be harnessed to reduce the gender pay gap. (Paragraph 89)

6.The lack of leadership shown by Ministers in addressing the question of flexible hiring is deeply disappointing. The benefits of flexibility are fully accepted by Government, yet policies encouraging employers to create more opportunities for flexible working are not forthcoming. By refusing to act, the Government is complicit in a system that is undermining productivity and perpetuating the gender pay gap. (Paragraph 97)

7.We welcome the Department for Education’s recognition of our findings on taking action to increase flexible working opportunities for teachers and increasing support for women returners. The measures they have announced are an important step in the right direction. (Paragraph 129)

8.There is clear evidence flexible working benefits the UK economy and individual employers. However, a culture of presenteeism and a lack of creative thinking about job design are hampering progress towards flexibility as the norm. Too few employers are considering the benefits of offering jobs as open to flexible working. (Paragraph 131)

9.The extension of the right to request flexible working to all employees does not deal with the problem of flexible hiring. Only 6% of well paid jobs are advertised as open to flexible working. This contributes to the gender pay gap by limiting women’s options and hampers productivity. (Paragraph 132)

10.Waiting for cultural change to increase the number of flexible jobs available will not help the Government achieve its aim of reducing the gender pay gap. We need to ensure that all employers consider whether every job they advertise could be worked flexibly. This would tackle skill shortages as well as reducing the gender pay gap. (Paragraph 133)

11.Our key recommendation is that:

12.We also recommend that:

Sharing care

13.Supporting men and women to share childcare more equally can help to reduce the gender pay gap, and help organisations retain and recruit staff. Policies that can have a real impact on increasing men’s take-up of such leave are therefore likely to have a positive effect on productivity. Such policies are likely to find favour with parents, employers and taxpayers. By ensuring that non-transferrable paternal leave is offered in addition to current maternity leave, the problem of women not wishing to give up their maternity entitlement can be avoided. (Paragraph 162)

14.Improving levels of pay can go some way towards encouraging more men to take up parental leave. Financial measures will not address the social and cultural context in which men and women make decisions about childcare and work. There is considerable scope for further research in this area to inform Government policy. (Paragraph 169)

15.We have seen clear evidence that the disproportionate share of unpaid caring taken on by women can adversely impact their earnings. However, women are not alone in facing these responsibilities. Many people will face periods in their lives when they juggle unpaid care with paid work. If the UK’s economy is to prosper more effective ways to balance the two must be found. (Paragraph 179)

16.We are disappointed that the only work the Government raised in the area of supporting carers was the nine pilot projects it has funded. Given that the scale of unpaid caring and its impact on both productivity and the gender pay gap. the Government needs to consider more comprehensive action as soon as possible. (Paragraph 184)

17.The evidence is clear that caring responsibilities are a significant barrier to women’s pay and progression prospects. As long as women continue to take disproportionate responsibility for the care of children and other family members, the gender pay gap will persist. (Paragraph 185)

18.More equal sharing of childcare responsibilities can help to reduce the gender pay gap by facilitating women’s return to the labour market and changing perceptions of men and women as being equally likely to take on caring responsibilities. Amongst younger couples in particular there is a strong desire to share parenting equally. Unfortunately, current policies are not doing enough to help men and women to achieve this goal. (Paragraph 186)

19.Low levels of pay for paternity and shared parental leave (SPL) are a significant barrier to men taking them up. Better pay and the option of part-time take up for SPL would improve fathers’ access to leave, particularly those from lower income groups. There is strong evidence for the effectiveness of non-transferrable paternal leave as a lever for encouraging shared care and reducing the gender pay gap. (Paragraph 187)

20.Balancing caring responsibilities with work is a growing problem for many workers, in particular women aged over 40. To achieve its policy objectives the Government must support employees with caring responsibilities to stay in work. Not only will this help to tackle the gender pay gap, it will also help organisations retain skilled workers in the face of high employment rates and low productivity. (Paragraph 188)

21.Our key recommendation is that:

22.We also recommend that:

Making the most of women’s skills

23.Many women who have left the labour market due to caring responsibilities, or for other reasons, will need to return to paid employment. This may be because of pension shortfalls or changes in circumstances like divorce. Others will choose to return to work. In both cases, the skills and experience of this group of women can help improve UK productivity. The Government should therefore invest in supporting their smooth return to the labour market as a matter of urgency. (Paragraph 197)

24.We believe there is much greater scope for returnship schemes aimed at women working in a range of occupations. As Close the Gap point out, “there are a number of good practice examples in this area” which could be used to inform a wider roll out of similar initiatives (Paragraph 206)

25.There is clear Government support for the use of apprenticeships as a mechanism to help women return to work. However, they will need to be better designed and branded to appeal to this group, particularly in terms of access. For women looking to increase their skills, or change occupation, apprenticeships could be a good solution. However, it should be remembered that many women returners will already have the skills and experience they need to function well in the job market and different measures are needed to help them (Paragraph 212)

26.Many of the solutions proposed to support women returners show evidence of previous success. As such they need to be considered as part of a wider, national strategy on supporting women back into work. (Paragraph 216)

27.It is surprising that in sectors where the UK needs the skills and experience of women who have left the workforce, more is not being done to help and encourage them back into work. Evidence suggests that it is not enough to hope that individual schools will reach out to women returners and facilitate their much needed re-entry into the profession. (Paragraph 219)

28.Our key recommendation is that:

29.We also recommend that:

Tackling low pay in highly feminised sectors

30.Women over 40 are concentrated within highly feminised, low paid sectors. Their low pay and lack of progression play a significant part in the gender pay gap. There must be more focus and investment aimed at these low paid employees if the goal of reducing the gender pay gap is to be achieved. (Paragraph 233)

31.The lack of investment in raising the pay and productivity of women working in low paid sectors is short-sighted. We welcome the forthcoming rise in the National Minimum Wage and recognise this will contribute towards reducing the gender pay gap. However, levels of productivity in low paid sectors need to be addressed. Taking action in this area will reduce the gender pay gap, improve the UK’s productivity and bring fiscal returns through reduced benefit payments and increased tax receipts. (Paragraph 238)

32.Some women in low paid jobs do not need further training or skills to get better paid employment. They simply need access to flexible work at the right skill level. There are projects that demonstrate that higher paid posts in sectors like retail can be worked flexibly. (Paragraph 244)

33.It is imperative that women in low paid occupations have access to training where it is needed to improve their opportunities to progress. There is a clear opportunity for more national, regional and local strategies to support this work. (Paragraph 250)

34.It is clear that improving skills in the care industry is essential to increasing productivity. However, the industry also suffers from significant market failures, a lack of investment and a lack of strategic thinking about how to address these problems. An industrial strategy for care, championed by BIS, would demonstrate the Government’s commitment to a joined up approach to the significant problems faced by the industry. This would drive efforts to improve the pay and productivity of 1.2 million low paid women working in the sector. (Paragraph 260)

35.There is significant scope for Local Enterprise Partnerships to address some of the issues faced by women in low paid sectors through brokerage services and investment in training. (Paragraph 268)

36.Our key recommendation is that:

37.We also recommend that:

Making GPG reporting regulations work

38.The evidence is clear that women over 40 and those working part-time experience the most pronounced gender pay gap. Breaking down gender pay gap statistics by age and part-time status will help organisations to understand and address any issues faced by women in these groups. (Paragraph 281)

39.If gender pay gap reporting is to have any impact it must help employers understand why pay gaps exist and lead to action to address these problems. It must be seen as the beginning of a process rather than the culmination of a tick box exercise. (Paragraph 288)

40.The current threshold of 250 employees only covers 34% of the workforce and excludes smaller organisations which have larger gender pay gaps. It is also inconsistent with the Public Sector Equality duty which applies to organisations with 150 employees. There is international evidence that, with support, smaller organisations can be helped to produce and understand their gender pay gaps. (Paragraph 301)

41.Equal pay audits can be a useful tool for organisations to analyse the relative positions of men and women. They can also be costly and time consuming so we would not recommend them being mandatory. However, expertise that exists around equal pay audits could be successfully be used by organisations looking for ways to take action on their gender pay gap. (Paragraph 306)

42.Equal Pay Questionnaires are a simple and cost effective way for employees to gather information about whether they are being paid fairly. As such they have potential to add to the Government’s aim of increasing pay transparency. (Paragraph 311)

43.The Government should amend its draft reporting regulations so that gender pay gap data is broken down by age and also part-time status. (Paragraph 312)

44.The Government should include all organisations with 150 employees or more within the gender pay gap reporting regulations. Within two years of the regulations commencing, organisations with more than 50 employees should be included. (Paragraph 313)

45.We also suggest that the Government should produce a strategy for ensuring employers use gender pay gap reporting as a first step for taking action rather than an end in itself. This strategy should be published a year before the regulations commence. (Paragraph 314)

© Parliamentary copyright 2015

Prepared 16 March 2016