Companies encouraged to act on gender pay gap

Posted 12/11/2009

A change to employment law is likely to be required to ensure companies act to close the gender pay gap, the findings of new research suggest.

The government is encouraging companies to undertake salary audits in a bid to address the issue of gender pay discrimination.

It hopes businesses will agree to participate in such studies voluntarily, but has included provisions in the Equality Bill to make audits mandatory for private sector organisations with more than 250 employees in 2013, if insufficient progress is made.

Figures contained in the Chartered Institute of Personnel and Development/KPMG Labour Market Outlook show that only 18 per cent of companies which would be affected by the legislation currently carry out pay audits.

KPMG’s head of reward Ingrid Waterfield advised companies to act now rather than waiting for employment law to change, as developing a fair salary structure is likely to have a positive impact on the workforce.

“Leading businesses examine their pay gaps not because of government, but because they understand the reputational and legal damage in not getting it right,” she added.

The report comes after a study backed by the British Medical Association revealed an average pay gap of £15,245 between female consultants and their better-paid male counterparts.