The gender pay gap – what is it and what’s changing?

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Over 50 years since the Equal Pay Act, women still earn less than men. That doesn’t necessarily mean women get paid less for the same job (although some do).  So what is the gender pay gap and what’s changing?

Q. The gender pay gap – what is it? 

A. The gender pay gap is the difference between the average pay of men and women. Latest figures from the government (published in December 2016) show the gender pay gap is 18.1%, which means men earn £1 for every 82p that women earn. This figure takes into account both full and part time work.

However, if you look at the gender pay gap between women and men who work full time, the gender pay gaps is 9.4%. This is based on a ‘median’ hourly rate and excludes overtime.

If you look at part time work, the gender pay gap reverses and women tend to earn more than men. Office for National Statistics (ONS) figures show they earn 5.5% more than men. However, according to the ONS, this is explained by the fact that more women work part time throughout their careers, whereas men are more likely to work part time at the beginning and end of their working lives.

Q. Why do women earn less?

A. One reason why women earn less than men, on average, is that they tend to work in occupations where pay is low. Another way of looking at it is that occupations that women tend to work in have low pay. For example, women make up 80% of the workforce in the health and social care sector, where pay is £40 a week less than the UK average.

  • Over twice as many men as women work as managers, directors and senior officials, and when women do take on these roles, they tend to earn less than men. Around 3% of men work in the caring, leisure and other service occupations – on the shop floor or in care homes or hospitals – compared to 16% of women.
  • The only statistic that has a similar gender difference is in the skilled trades, where 2% of women work and almost 15% of men. Across manual trades such as plumbers, electricians and carpenters, only 1% are women. Women also make up 92% of secretaries and 94% of childcare assistants, but only 7% of engineers and 20% of architects.
  • If you look at weekly pay, rather than hourly rates, the pay gap is bigger because men tend to work longer hours than women and are more likely to do overtime and get paid larger bonuses.
  • The most recent government figures I could get for the number of hours worked was 2013 – but these showed that women work 37.4 hours a week, on average, compared to 40.1 hours a week for men. That’s a 7% difference.

So, women working full time earn almost 10% less per hour, and work for 7% less on average per week. And that’s before you take into effect what they may be missing out on by way of overtime and bonuses.

Q. Is the gender pay gap the same across all sectors?

A. No, definitely not. According to the ONS, if you look at average earnings rather than the hourly rate someone is paid:

  • Women earn 32.5% less than men in the financial services and insurance sectors.
  • Women earn 28.5% less than men in the electricity, gas/steam and air conditioning supply sectors.
  • Women earn 20.5% less than men in the scientific and technical activities sectors.
  • Women earn 2.2% more than men in the transportation and storage sectors.
  • Women earn 4.2% more than men in the mining and quarrying sectors.

Q. What does the law say now?

A. Paying someone a different rate for the same job based on their gender has been illegal since the Equal Pay Act became law in 1970. Since the Equality Act of 2010 it’s been illegal to pay someone less if they do a job that’s broadly the same, of similar value or rated as equivalent.

So, many disputes are about whether one job is of similar value to another, rather than because men are being paid more than women to do exactly the same job.

Q. What’s going to change?

A. Figures from 2014 show that most companies didn’t collect information on pay by gender. Only two out of five had analysed their own pay data to see if there was a gender pay gap and fewer than a third had carried out a full gender pay gap review.

However, from April 2018, firms in the private sector employing 250 people or more will have to publish the average difference between their male and female employees’ hourly pay. They will have to start gathering this information from April 2017 so they will have 12 months’ figures when they come to publish. The government will also publish ‘league tables’ highlighting those employers that don’t do anything – or enough – to address the gap in pay between men and women.

Q. What can I do if I think I’m being paid less than male colleagues?

A. It depends on whether or not you’re doing a job of the same or similar value. If you think you’re being discriminated against, you can take your case to an employment tribunal. However, be aware that this will cost you £1,200 (a £250 claim fee and a £950 hearing fee).

Before you can go to an employment tribunal you have to notify ACAS (the Advisory, Conciliation and Arbitration Service), where you’ll be given the option of using their free mediation service.

SAVVY TIP: Since October 2014, employers that are found to discriminate against workers through pay may have to complete an equal pay audit as well as pay compensation.

Related articles:

How to ask for a pay rise — and get it

Employee share schemes – owning shares through your workplace

Women on boards – what’s happening next and what does the Davies report say?

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