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How to close the pay gaps

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gender pay gap, research, strategy, Equality and Human Rights Commission,Pay gaps are a clear indicator of inequalities in access to work, progression and rewards.

The Equality and Human Rights Commission has published a strategy setting out what it considers needs to change and who needs to take action to reduce gender, ethnicity and disability pay gaps.

The recommendations are based on new evidence from research by the Equality and Human Rights Commission into the size and causes of these pay gaps, and whether interventions so far have been successful.

Pay gaps are a measure of the difference in average hourly pay between different groups and are a good indicator of inequalities in access to work, progression and rewards.

This research found that pay gaps are substantial.

The Commission is now calling on UK, Scottish and Welsh governments and employers to address pay gaps in a comprehensive and coordinated way.

In Great Britain in 2016 the gender pay gap stood at 18.1 per cent, the ethnicity pay gap at 5.7 per cent, and the disability pay gap at 13.6 per cent.

But of course these are average figures and disguise wide differences, with some groups experiencing far greater pay gaps than others.

However, at their root are some common causes, such as poorer educational attainment, different educational choices and the concentration of these groups in lower paid, lower skilled and part-time jobs.

The research also shows that the pay gaps experienced by women, people from ethnic minorities and disabled people arise largely from the barriers they face getting into and progressing at work.

Some elements of pay gaps result from the choices people make about balancing work with other aspects of their lives, though these choices may be dictated or constrained by stereotypes about the roles people, particularly women, are expected to play in society.

Part-time work is predominantly low-paid work and therefore the choice to work flexibly inevitably leads to lower pay.

The aim of this strategy is therefore to break down the barriers people face, tackle the stereotypes that might influence some of their choices and to change employment practice to make flexible working available in more senior roles, so that a choice to work flexibly does not mean a choice to work at a low rate of pay.

There are huge economic benefits to decreasing pay gaps: estimates suggest closing the gender pay gap in the UK would add £600 million to additional annual GDP by 2025, and improving the participation and progression of ethnic minorities at work would add £24 billion a year to the economy.

Taking effective action to get disabled people into work would go some way towards reducing the £100 billion the UK loses from people being out of work, and supporting disabled people at work would also help reduce the amount employers spend each year on sickness absence pay and associated costs – currently £9 billion.

The UK, Scottish and Welsh governments have already taken positive steps to reduce pay gaps.

The Welsh government has set clear equality objectives to identify and reduce the causes of employment, skills and pay inequalities.

And in April 2017, the UK government introduced gender pay gap reporting for large private companies across Great Britain and for public bodies in England; the Scottish and Welsh governments already require pay gap reporting by public bodies.

All three governments have been encouraging companies to achieve a more representative gender and ethnic balance on their boards and in their senior management teams. They have also been taking action to support disabled people at work.

However, the Equality and Human Rights Commission thinks more needs to be done if the UK, Scottish and Welsh governments are to achieve their aims to reduce the gender pay gap in a generation and to make Britain a place where everyone can achieve the best they can and be rewarded fairly for their efforts.

Based on the research evidence, the Equality and Human Rights Commission is recommending that the UK, Scottish and Welsh governments, their agencies, and employers need to take action to:

1 – Unlock the earning potential of education by addressing differences in subject and career choices, educational attainment and access to apprenticeships by:

Taking steps to improve attainment outcomes for pupils with a disability and/or SEND and holding relevant authorities to account when schools fail to make reasonable adjustments;

Continuing to tackle stereotypes and encourage wider subject and career choice for women, ethnic minority and disabled students; and

Improving the participation and progression rates for under-represented groups in apprenticeships.

2 – Improve work opportunities for everyone, no matter who they are or where they live by:

Investing in regional economies and training in sectors and industries to offer skills and opportunities; and

Developing regionally-based labour market strategies with specific actions to tackle significant gender, ethnicity and disability employment and pay.

3 – Make all jobs at all levels available on a flexible basis by:

Making the right to request flexible working a day-one right;

Offering all jobs including the most senior on a flexible and part-time basis

4 – Encourage men and women to share childcare responsibilities by:

Introducing a dedicated non-transferable, ring-fenced ‘use it or lose it’ parental leave for fathers with a meaningful pay rate; and

Assessing the impact of statutory childcare and different models of provision on women’s participation in the labour market and making changes to improve this.

5 – Reduce prejudice and bias in recruitment, promotion and pay by:

Supporting a new national target for half of all new senior level appointments in FTSE 350 organisations to be women;

Consulting with employers and relevant organisations on extending the statutory requirement to report on gender pay gaps to disability and ethnicity to encourage employers to consider the scale and causes of all their pay gaps; and

Using fair, transparent processes for recruitment and development decisions that tackle discrimination and bias.

6 – Report on progress in reducing pay gaps by:

Developing national action plans to close gender, disability and ethnicity pay gaps and report regularly on progress;

Monitoring the effectiveness of mandatory gender pay gap reporting on closing pay gaps;

Publishing statistical information on the scale and trends in disability and ethnicity pay gaps; and

Consulting with employers on the most effective way of extending reporting requirements to ethnicity and disability pay gaps.

To look at each of these recommendations in more detail, click here.

The paper clarifies what needs to change and who needs to take action to reduce gender, disability and ethnicity pay gaps.

You could forward it to your MP

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