UK businesses accused of understating gender pay gap

Labour Party

A loophole which allows firms to report favourably on how male and female members of staff are remunerated has been exposed. With less than a month to go before all firms with more than 250 employees must publish its figures on female and male pay, it threatens to jeopardise the entire project and most importantly impedes the ability to make sensible and equitable changes.

All British companies with 250 employees must report their remuneration packages by 4 April. However, some firms have reportedly used their partnership structures to disguise and under report their own gender pay gap figures.

Those who have reported their figures so far include Linklaters and Ernst and Young. Their figures show a much smaller gender pay gap than other companies such as Barclays Bank. However, some of the firms where the figures indicated a smaller discrepancy are accused of reporting in a way which gives a more favourable picture than really is the case. The loophole has allowed them to distinguish between partners (in law firms for example) and lawyers. Only the latter group was classed as employees and therefore only those figures were reported.

Although the way in which the firms are reporting is within the letter of the law it’s not in the spirit. Taking advantage of the loophole distorts figures and means that any ability to scrutinise the situation and ultimately improve the gender pay gap is made more difficult, if not impossible. To address the issue properly the figures must be a true reflection. It’s not rocket science!

It’s a real shame and it doesn’t help either the Government to address the problem, or business leaders to rectify the gap. It’s pointless to hide behind a mask of misleading figures.

Some are calling on the Equalities Commission to sanction those who report in such a way. There may well be a case for this because the fundamental problem which is that women are being paid less than men for doing the same work is wrong and it can’t be addressed properly if the reporting is so skewed that it doesn’t represent the real problem.