The U.K. is asking companies to disclose their gender-pay gap. The first-of-its-kind requirement opens a rare window into pay discrepancies at large firms.
WHAT ARE COMPANIES DISCLOSING?
Britain is requiring companies with more than 250 employees to report differences in pay between men and women. That includes subsidiaries of global multinationals, even if their headquarters are outside the country. Companies must calculate and disclose median hourly pay for all their U.K.-based employees from a single “snapshot” day, April 5, 2017.
So far, of the 10,016 companies that have reported, most have said median hourly pay for women was less than median hourly pay for men. Half of the companies reported that median hourly pay for men was more than 14.6%higher than for women. About 1,200 reported pay for women was higher. Almost 1,400 reported a negligible gap, a number that is statistically improbable. That’s raised questions about the reporting requirements and whether companies disclosed properly.
HOW WALL STREET FARED
Banks and financial firms have disclosed sometimes-sharp gender pay gaps, a legacy of long-established cultures of men dominating top trading and advisory roles and women filling more junior posts. Roll over the blocks to see which banks landed where on the scale.
Fewer women are represented at the top echelons…
Percentage of women in the highest pay quartile.
14.6% of the highest pay quartile at Merrill Lynch Intl. are women
…but are more present in the lowest.
Percentage of women in the lowest pay quartile
46.9% of the lowest pay quartile at Morgan Stanley U.K. Ltd. are women
HOW BONUS PAY STACKS UP AGAINST HOURLY PAY
The U.K. required companies to disclose breakout data for each quartile of its workforce, as well as any gap for bonus pay. In several big banks, the gap between bonuses paid out to women and men is much steeper than hourly pay.
Women lag far behind in the bonus pool…
Median bonus pay for women at Goldman Sachs Intl. is 67.7% lower than for men
Median bonus pay for women as a percentage of men’s pay
…but do better when it comes to hourly pay.
The gap between median hourly pay for men and women
Median hourly pay for women at JPMorgan Securities PLC is 46% lower than for men
Median hourly pay for women as a percentage of men’s pay
WHAT CAN WE LEARN FROM THE U.K. DISCLOSURES?
In the U.S., the Obama administration rolled out similar rules that would have required businesses to submit data about how much they pay workers of different genders, races and ethnic groups. The data wasn’t meant be publicly disclosed, but it was supposed to be available to the government, and could trigger probes. The effort was scrapped last year by the Trump administration, which said it would be burdensome for business.
Because of the lack of such comparable data, the U.K. disclosures are being scrutinized not only for what they might say about British firms, but also about corporate practices at global firms.
“The U.K. is very similar to the U.S. in this respect,” said Oriana Bandiera, a professor at the London School of Economics, who spearheaded the university’s own gender pay gap review. “The cultural correlation is very high here.”
Crucially, the presence of a gender pay gap doesn’t necessarily indicate that women are paid less for doing the same jobs as men. In fact, paying women less for doing the same work as men has been explicitly illegal in the U.K. for over forty years.
More often than not, the gap is a reflection of a gender imbalance within the company’s structure. A gender pay gap can occur if a company has a greater proportion of men than women in higher-paid jobs, or a higher proportion of women than men in lower-paid roles. It can also occur if the company has the same proportion of men and women in higher-paid roles, but more women than men in lower-paid roles.