20 November 2024 marked Equal Pay Day — but despite its name, it doesn’t signify the day men and women earn the same. Instead, it highlights a stark reality: from that day on, women are effectively working the rest of the year for free due to the pay gap between men and women.
That being so, an equal pay day campaign is being pushed, and we delve into what it entails. We explore whether there is such a thing as a wage gap in the UK and investigate actionable steps senior leaders can take to address it. Finally, we examine the potential consequences employers may face if they fail to meet their legal obligations in closing the gap.
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What is the Equal Pay Day Campaign?
The Fawcett Society has been campaigning for women’s equality since 1866. Currently, their most notable campaign is the equal pay day. The concept behind this initiative is marking the day when, due to the gender pay gap in the UK, women work the remainder of the year free – this year, that day fell on November 20th. Consequently, they’ve identified several causes driving the disparity and have proposed actionable solutions to address why women are paid less.
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Fawcett highlights that women often bear the brunt of caregiving responsibilities, a challenge compounded by the lack of affordable childcare. This imbalance frequently forces women to step back from their careers to focus on raising a family. As such, to address this, they’ve advocated making flexible working the default for employers and emphasised the urgent need for comprehensive childcare system reforms.
Equal Pay Day: Is the Gender Pay Gap Real?
As you might have gathered, there’s still a significant wage gap in the UK. According to Fawcett, this currently stands at 11.3%—an increase of 0.6% compared to last year. In practical terms, this means women take home £631 less per month than men, amounting to a staggering £7,572 annual shortfall.
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Shockingly, though, Fawcett’s Equal Pay Day campaign reveals that the pay gap between men and women doesn’t end there. If a woman is from a minority ethnic background, her equality in pay will be even worse. While the overall gender pay gap stands at 11.3%, it reaches 25.9% for Pakistani women and 28.4% for Bangladeshi women.
Closing the Gender Pay Gap in the UK: Lessons from the Equal Pay Day Campaign
Drawing from Fawcett’s Equal Pay Day campaign, there’s much senior leaders can do to stop women being paid less. We’ve already touched on the enhanced flexibility and access to childcare, but more can still be done.
Pay Audits
According to Fawcett, “Even when men and women work the same hours and in the same roles, nearly two-thirds of the gender pay gap remains unexplained”. Subsequently, they argue that discrimination is one of the few plausible explanations for this persistent lack of equality in pay.
With this in mind, it’s crucial senior leaders conduct regular pay audits. By doing so, they can identify discrepancies in remuneration between male and female employees performing similar roles. This is essential because, once revealed, they can immediately address the disparity and ensure their female staff aren’t paid less.
Transparent Salary Structures
Although identifying wage inequality is essential, whether through gender pay gap reporting or an audit, taking steps to resolve the issue matters, too. A transparent structure that clearly defines how salaries and promotions should be determined can be an excellent way to achieve this.
If managers and their subordinates understand salary expectations, elements like unconscious bias are less likely to have an impact. Instead, skills, experience, and performance will contribute to one’s wage.
Hiring Process Reviews
Yet, before women can even earn the same as a male colleague in an equivalent role, they must be able to get the job. Too often, we see women being underrepresented at work, particularly in higher-paying, senior roles.
As such, senior leaders must ensure their hiring processes are free from gender bias and provide equal opportunity for all candidates. Implementing blind application screenings and ensuring interview panels are diverse are just some of the ways they can achieve this.
Leadership Development Programmes
Building on the above, senior leaders should consider introducing leadership development programmes to ensure women have access to the same senior leadership opportunities as men. These programmes can help prepare women for managerial roles and increase their representation in higher-paying positions via active networking.
Intersectional Disparity Assessments
Finally, as highlighted in Fawcett’s Equal Pay Day campaign, women from ethnic minorities face greater discrimination. Because of this, senior leaders must recognise and tackle the compounded challenges they face. Among other things, this could include assessing the difficulties experienced by women from ethnic minorities, establishing specific initiatives to address issues highlighted, and ensuring pay practices consider intersectional factors.
The Cost of Ignoring Equal Pay Laws
In the UK, men and women undertaking work considered the “same” are entitled to equal pay. This is covered by the Equality Act 2010. What’s more, if an employer has 250 or more employees, they have a legal obligation concerning annual gender pay gap reporting.
If an employer fails to comply with either of these obligations, they could face substantial repercussions. Failing to provide equal pay could land the employer in an employment tribunal, resulting in significant legal costs and compensation to pay. They could also face investigations, court orders, and potentially unlimited fines if they breach their reporting obligations.
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However, financial penalties aren’t the only thing employers should be concerned about. Employers found to be in violation of pay equality or gender pay gap reporting may also face reputational damage. Individuals may be discouraged from working for the employer, resulting in talent shortages or increased staff turnover, and other organisations may want to distance themselves from the bad publicity. In any event, failing to remain legally compliant is bad news for the employer, making compliance essential.
Overall, there is still much to do to eliminate the gender pay gap in the UK. That being said, if we continue to highlight the issue and employers find ways to actively address it, we can hopefully one day achieve a completely equal workplace!
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