Moving towards equal pay: Closing the gender pay gap

The Equal Pay Act 1970 was the first piece of legislation in the UK that gave women the right to equal pay in the workplace. Ahead of the Act’s 50th anniversary on 29 May 2020, this blog post explores the way equal pay is defined and measured in the UK, legislation that has underpinned progress towards pay parity, and possible future measures for attaining equal pay in the UK.

What is equal pay?

Equal pay is often defined as parity in wages between men and women. The International Labour Organisation (ILO) expands on this definition by defining equal pay as the right to equal remuneration for women and men for work of equal value. In 1951, this right was enshrined in the ILO’s Equal Remuneration Convention, which was ratified by the UK on 15 June 1971.

Measuring equal pay: The gender pay gap

In the UK, the gender pay gap is one of the primary means of measuring the progress towards pay parity. The gender pay gap is the percentage difference between average hourly earnings for men and women. The pay gap between men and women can be attributed to a variety of factors, such as women being more likely to work part-time, or fewer women in managerial positions. However, unequal pay between men and women in similar roles is also reflected in pay gap data. Since the Office of National Statistics began collecting gender pay gap data in 1997, it has shrunk from 27.5% to 17.3% overall and from 17.4% to 8.9% for those in full-time work.

How equal pay laws have changed

Equal pay Act 1970

In 1968, female machinists working at the Ford factory in Dagenham found that they were being paid 15 percent less than their male colleagues for equivalent work. They went on strike, calling for ‘equal pay for equal work’. The strike paved the way for the Equal Pay Act 1970, which was introduced by Barbara Castle, the then Secretary of State for Employment and Productivity.

The Equal Pay Act 1970 was given royal assent on 29 May 1970. It came into force in 1975, giving employers five years to equalise pay between men and women undertaking similar or equivalent work. During this five-year period, the average full-time wage for women in the UK in comparison to men increased by 5%, from 72% to 77%. This was the largest increase seen over such a short period of time in the UK. In 2010, the Equal Pay Act 1970 was repealed by the Equality Act 2010, which also contains a right to equal pay.

National Minimum Wage Act 1998

The Labour Government passed the National Minimum Wage Act 1998 after the Low Pay Commission recommended the introduction of a national minimum wage (NMW).

The introduction of the National Minimum Wage Act had the second largest legislation-driven effect on the gender pay gap in the UK. Since the introduction of the NMW, the gender pay gap has decreased from 17.4% to 8.9%. Furthermore, the Low Pay Commission found that women gained more than any other group from the introduction of the NMW.

Equality Act 2010

The law on equal pay in the UK today is set out in the Equality Act 2010, which gives a right to equal pay between women and men for equal work. According to the Equality and Human Rights Commission (EHRC), the Act implies a sex equality clause automatically into all contracts of employment, ensuring that a woman’s contractual terms are no less favourable than a man’s.

Under schedule 19 of the Equality Act 2010, public bodies have been required to publish their gender pay gap data since the Act came into force. In 2017, the Conservative Government under Theresa May introduced mandatory pay gap reporting for private organisations with 250 or more employees.

Proposals for change

Equal pay audits

The EHRC suggests that companies should carry out equal pay audits in addition to pay gap reporting. An equal pay audit involves comparing the pay of men and women doing equal work in the organisation in question. In doing so, any differences in pay between men and women doing equal work can be identified, the causes of any differences in pay can be investigated and instances of unequal pay can be eliminated.

However, of the 440 employers the EHRC surveyed, only four were committed to carrying out future pay audits. There is little information available on audits being carried out.

A ‘right to know’

Recent research from the Fawcett Society revealed that only 36 percent of people in the workplace knew that women had the legal right to ask their male counterparts about their salaries if they suspect pay discrimination is occurring. In addition, only 24 percent of people felt that they could talk about salaries in the workplace. In response, the Fawcett Society has campaigned for an equal pay bill. This bill would give women the right to ask their employer directly about pay. Working with the Fawcett Society, Baroness Prosser (Labour) introduced a private member’s bill, the Equal Pay Bill, in the House of Lords in January 2020.

The Fawcett Society reported that 52 percent of women surveyed reported they would be embarrassed to ask their male colleagues how much they earn. The ‘Right to Know’ in the bill aims to overcome this obstacle by ensuring women can get information from their employer about equal pay if they suspect pay discrimination, rather than having to rely on personal conversations with colleagues.  

Widening the scope of equal pay

Pay disparities in the UK are not limited to disparities in pay between men and women. Recent questions in both the House of Lords and the House of Commons have centred around the pay gaps that exist in the UK because of social class or ethnic group.

The latest data on the ethnicity pay gap points to a complex picture. Some racial groups, such as Chinese ethnic groups, tend to earn more on average than their White British counterparts. However, most employees in the Black African, Caribbean or Black British, Other and White Other ethnic groups on average earned 5% to 10% less than their White British counterparts between 2012 and 2018. The pay gap was largest between White British and Bangladeshi and Pakistani ethnic groups, standing at 20.2% and 16.9% respectively in 2018.

The latest disability pay gap data showed that on average, disabled people are paid 12.2% less than their non-disabled counterparts. Disabled employees with a mental impairment had the largest pay gap at 18.6%, while for those with a physical impairment the pay gap was 9.7%. Those with other impairments had the narrowest gap, at 7.4%.

Although progress has been made towards pay parity over the last 50 years, the data reveal there is still a way to go before equal pay—in respect of gender, ethnicity, and disability—is reached in the UK.

Image by Stux from Pixabay.