Closing the Pay Gap

The Equality Act isn’t expected to close the pay gap between employees differing in either gender, race, disability, religion, age or sexual orientation.

Experts who have been examining and considering the Act, which is due to be enforced later this year, have concluded that the Act’s aim of increasing the diversity of the workplace – especially with regard to increasing the number of women in top jobs – will not be achieved. They claim that it will only make the lives of employers more difficult.

Some of the Act’s key points include compulsory equal pay audits in the public sector, an end to enforced pay secrecy, and an allowance for “positive action”. Public sectors will have to publish the findings of their equal pay audits to illustrate any inequalities, but the Act does not demand the same measures from the private sector. However, it has made it clear that businesses that are bidding for public contracts will be expected to comply as well.

Criticism
Although the Act seems fair, most organisations that are used to dealing with issues of equality are aware that realistically no two people are equal. Another concern is that the Act’s insistence on outlawing the “gagging clauses” commonly found in financial firms that have bonus schemes. These clauses prevent staff discussing pay and outlawing them on the grounds of their supposed discriminatory nature seems strange to some, who say that City workers tend to want to keep their pay confidential and that there is no discrimination involved.

As for publishing average bonus data by sex, experts believe that this will only show what is already known – that there aren’t enough women in senior roles in the City – rather than fulfilling its aim of showing whether people are being underpaid or not. Further criticisms include the point that organisations with open or hidden prejudices are still unlikely to be hampered by the new legislation at all.

Support
In contrast, the CIPD has said that businesses should be grateful for the Act, since the government has opted for a lighter approach, rather than enforcing compulsory pay audits in both sectors. The CIPD’s Dianah Worman stated that private businesses “should recognise that if appropriate action is not taken then more legislation may follow”. There has also been support for the Act for its predicted effect on organisations that pick from large pools of recruits, like the police. It’s thought that the “positive action” to promote minorities when candidates are equally qualified will work well for public sector organisations that involve a lot of interaction with the public.

Whether or not the Equality Act will live to fulfill the expectations of experts, we’ll have to wait and see.