Research just published by think-tank The Resolution Foundation provides an interesting perspective on the gender pay gap.
Their research describes some good news on progress through the recent generations. For women in their 20s, their data shows the pay gap has shrunk as follows:
• Baby Boomers – 16%
• Generation X – 9%
• Millenials – 5%
This seems strong evidence that, during the initial phase of employment at least, the pay differential between young men and women has narrowed significantly.
However, the other headline from the analysis is what happens to the pay gap during the 30s and early 40s, when women are most likely to have children. At that point, a pay gap opens up which seems not to be short-lived but which continues for decades (described as the “lifetime earnings penalty”).
Their research also suggests that some of the progress for younger women in recent generations shows signs of stalling during the 30s. Their data shows the pay gap for women at age 30 has not shrunk as significantly as for younger women:
• Baby Boomers – 21%
• Generation X – 10%
• Millenials – 9%
Laura Gardiner of The Resolution Foundation says: “The suggestion is that the old challenges associated with having children endure for young women today. So millennial women should still expect to face a significant lifetime earnings penalty compared to their male counterparts.”
By April 2018, private and voluntary sector organisations that employ 250 or more employees will be obliged to publish detailed data on the gender pay gap within their workforce.
Although the publication date seems some way off, the data reported will, in fact, be based on a ‘snapshot’ of data from April this year, 2017. It doesn’t leave long to prepare for what are rather detailed and prescriptive regulations on how the data must be compiled.
The government has also published similar regulations for public sector employers with over 250 employees. The ‘snapshot’ date for the public sector will be 31 March 2017 with a publication date for these figures 12 months later.
We are advising employers likely to fall within the scope of the regulations to progress preparations urgently in terms of:
• The practical aspects – capturing the right data for the right employees and doing a ‘dummy run’; and
• Managing reputation (specifically with current and potential future female employees) – what commentary would you put on your gender pay gap data if you had to publish it today?
Our employment solicitors work in partnership with organisations to improve their HR practices and advise on employment issues. To discuss this article or any other HR issue call 01872 265100 or employment@stephens-scown.co.uk.