Call for gender pay gap reporting to be imposed on small businesses

A report issued by the Business, Energy & Industrial Strategy (BEIS) Committee earlier this month recommended that all businesses with 50 or more staff should have to publish details of their gender pay gaps every year.

Currently, only organisations with 250+ staff are caught by 2017 regulations which require them to publish (on their own websites and on the Government’s website) figures in relation to their mean and median pay and bonus gaps.

The first set of figures published earlier this year showed that these organisations have a median pay gap of 9.7%, with 78% of those caught reporting that men were paid more than women.

However, it is estimated that businesses with smaller workforces, in particular those with 50-99 employees, will have a much wider average gap. Office for National Statistics research shows that the national median is around 18%.

The Government has so far decided not to impose the reporting requirements on small and medium-sized enterprises (SMEs) due to the administrative and costs burden this imposes. However, the BEIS report recommends that due to the likely size of the average gap among SMEs, the only way of ensuring the effectiveness of the reporting rules would be to widen their net to capture those businesses.

The report also recommends that a power should be introduced for the Equality and Human Rights Commission to impose financial penalties on any organisations which fail to comply with those requirements.

As the Government will now need to consider the proposals, it is likely to be some time before SMEs are subject to the reporting regulations; however, any SMEs which are concerned about doing so may consider reviewing their figures internally and making any necessary adjustments.