Business

Should we legislate against the gender pay gap?

Men and women looking at laptops Image copyright Getty Images

Like many countries, the UK has made slow progress in reducing its gender pay gap.

However, it might do well to look to Iceland, which has come up with a radical plan to get rid of its pay gap completely.

A bill was tabled in the country's parliament that would require firms to prove they offer equal pay to employees, or potentially face fines.

It comes as less stringent British laws on gender pay come into effect.

These will require firms to publish data on their gender pay gap, but not penalise offenders.

So should the UK go further and outlaw the gender pay gap?

Iceland ranks first on the World Economic Forum's 2015 Global Gender Gap Index, but the nation of 323,000 people still has a difference of 7% between the sexes.

However, the new bill would require companies with 25 or more employees to go through audits and gain certification of their equal-pay programmes.

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Image caption A report last year found the gender pay gap in the UK will not close until 2069

Thorsteinn Viglundsson, social affairs and equality minister, accepted the law could be "burdensome" for the country's businesses, but said the benefits would outweigh the costs.

And with cross party support, the bill could well become law by next January.

According to Sam Smethers, chief executive of the Fawcett Society, which campaigns for equal pay, similar measures must be considered in the UK.

At 9.4% in 2016, the difference between average pay for male and female full-time employees in Britain was little changed from the 10.5% gap five years earlier.

And a Deloitte report last year found the gender pay gap in the UK will not close until 2069 based on current salary progression.

"It's impressive to see what is being introduced in Iceland and full equal pay audits would be good to see. But we are some way off that here," Ms Smethers said.

Careers advice

Certainly, the government is making moves to tackle the issue.

From Thursday, UK employers with more than 250 staff will be required by law to collect data so they can publish their gender pay gap, gender bonus gap and the number of women and men who get a bonus.

But employer groups said said introducing audits and certification, as Iceland may do, would not solve the gender pay gap.

Neil Carberry, director for people and skills policy at the CBI, said: "The gender pay gap and unequal pay are different. While many factors contribute to the UK's gender pay gap, unequal pay is already illegal and is only a part of the gap."

He added: "To close the gender pay gap in the UK, businesses and the government need to work together to address careers advice, progression and support networks, like childcare. These are not things that an employer certification regime would address."

Complex picture

Verity O'Keefe, senior employment and skills policy adviser at EEF, which represents manufacturers, said flaws in the UK's new rules also needed to be addressed.

"The transparency [the new data collected] will drive is important, but it must also be recognised that the simple snapshot it will provide may often hide a more complex picture," she said.

"Manufacturers are likely to unearth some higher than average figures. However, this is not due to a lack of support for women in our sector, far from it."

More needed to be done to get young girls into "all important" science, technology, engineering and maths (STEM) subjects, Ms O'Keefe added.

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