SMEs won’t be forced to disclose their gender pay gap

The government has confirmed that small and medium-sized enterprises will not be obliged to reveal their gender pay gap.

Currently, business employing more than 250 people must publish the pay differential between men and women. It’s part of an ongoing strategy to equalise salaries and eradicate discrimination.

Following a review, the Business, Energy and Industrial Strategy (BEIS) select committee recommended that the requirement should be extended to businesses with 50 or more employees.

In its response, the government has urged smaller companies to publish the information voluntarily but has stopped short of making it a legal requirement. It said: “Given the range of metrics required, it was felt that reporting could be particularly burdensome for small and medium sized businesses and so the requirement should be restricted to large employers.”

The government also rejected the committee’s recommendation that organisations should be obliged to publish an action plan stating how they would close the gender pay gap.

“While the Government urges all employers to produce an action plan alongside their figures, we were aware that including it as a mandatory requirement might result in a prescriptive format with limited value to employers and employees.

“By not making them mandatory, we have given employers the freedom to produce an action plan that is relevant to their individual situation which they can truly commit to and embrace.”

Although such action plans are not mandatory, the government statement was clear that companies ought to produce them and do everything possible to reduce pay inequality. “We have been clear that employers must take action to close the gender pay gap in their organisation, beyond reporting.

“Drafting an effective action plan is crucial to this. We estimate that approximately 48% of employers have published action plans alongside their figures in the first year of reporting.”

Please contact Jackie Webb if you would like more information about the issues raised in this article or any aspect of employment law.