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The Salary ‘Transparency Agenda’: Who Needs to Know? by Emily Pfefer

Iceland splashed across Twitter feeds when on January 1, 2018 the nation’s first-in-the-world law came into effect, requiring companies of 25 or more employees to proactively certify that they pay men and women equally for the same jobs or face fines for non-compliance. Despite being ranked by the World Economic Forum (WEF) as having the narrowest gender gap in the world for the past 9 years, Iceland’s government recognised the need to take stronger action against their still persistent gender pay gap. The WEF Global Gender Gap Index is based on a broader array of political and economic measures than only the gender pay gap.

9 January 2018

It’s too early to determine whether Iceland’s policy will succeed in its goal to eradicate its gender pay gap by 2022. The policy as reported may do little to address the extent to which broader occupational segregation accounts for the aggregate gender pay gap. This refers to clustering of men and women in different kinds of jobs, which are paid at different rates, such as was critical to the landmark UK Supreme Court ruling in 2012 against the Birmingham City Council. The ruling allowed scores of women from female-dominated jobs like cooking and cleaning to sue for equal pay in civil courts based on the higher pay given to men in male-dominated jobs of equal value, like refuse collection. The ability of this law to address occupational segregation’s contribution to the gender pay gap hinges on whether the equal pay certifications in Iceland require employers to demonstrate their salary comparisons according to a genuine implementation of the principle of equal value or not. Even still, the law is toothless against occupational segregation across employers, rather than within them, which would continue to be reflected in national statistics. 

Never-the-less, Iceland’s new law is certainly a radical step forward in the realm of equal pay law. Well-meaning though traditional equal pay laws may be, the reality of most western equal pay legislation is that the onus continues to be generally placed on the victim to identify her mistreatment. This can be tough because, apart from the legal costs and stress that may be involved in bringing an equal pay claim, many people for a variety of complex reasons are uncomfortable talking about their pay. Employers are not incentivized to push back against this wage taboo. Frankly, the less people know about what others around them earn, the more power employers preserve to keep payroll costs down.

Despite the public promotion of a so-called salary ‘transparency agenda’ under recent UK governments, the UK is not immune to this problem. Then a Women and Equalities minister, MP Jo Swinson remarked on this matter in a 2013 media interview, saying "I think sometimes there's something very British in our culture where we don't talk about money, and I think that is one of the things that holds women back.”

The Equality Act 2010, passed in the final days of the UK’s last Labour government, anaemically nudged UK employers to at least consider appearing to become more transparent about their pay on paper. Although much of the Act was implemented in October of 2010, the then-coalition Government choose another path for section 78 of the statute. This portion of the Act empowered the government to lay regulations mandating employers to publish their company level gender pay gap. However, the government opted to sit on this power, instead launching the voluntary Think, Act, Report scheme in September 2011. In February 2016, the government responded to feedback from its consultation to consider implementing section 78. Unsurprisingly, only 7 companies had actually voluntarily reported their gender pay gap data by then. Acknowledging this failure, the Conservative government finally promulgated the regulations in 2017 to mandate gender pay gap reporting. These regulations mandate the first reporting publications by March and April 2018 for public sector and private & voluntary sector employers of 250 or more employees respectively.    

Whether uptake of this reporting requirement, which although ‘mandatory’ is accompanied by no current sanction financial or otherwise for non-compliance, will be significantly higher than Think, Act, Report was and whether it will have any practical impact on the UK’s aggregate gender pay gap is still unknown.

What we can say is that this measure to identify the gender pay gap, in contrast with Iceland’s new law, precisely avoids consideration of the kind of one-to-one equal pay comparisons necessary to identify discrimination. Women remain left to figure it out themselves, which is something I am exploring in my own PhD research on the culture of secrecy and the gender pay gap in UK higher education. Last November, I was able to present early findings from my survey of pay discussion behaviour by UK academics at the Global Equality and Diversity Conference 2017 in London.

To learn more about my developing research, feel free to get in touch via Twitter (@EmPfefer) or email e.d.pfefer@qmul.ac.uk

 

 

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