What is going on here?
Companies with over 250 employees in Great Britain have been required to report their gender pay gap.
What does this mean?
The gender pay gap refers to the percentage difference between the average hourly earnings for men and women in an industry. This is different from pay inequality, which compares men and women in the same role, performing identical work (which is not what’s being measured here).
The legislation enforcing this is the Equality Act 2010 (Specific Duties and Public Authorities) Regulations 2017 and the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017. These came into effect on the 5th April 2017 and required the results to be published onto a government website by the 4th April 2018. The median pay gap among all reported companies was 9.7% and more than three quarters have been found to pay men more than women on average. Furthermore, while there is no punishment for a wider gap, the government has stated that refusing to provide such figures could result in “unlimited fines and convictions”.
Why should law firms care?
Within law firms, the gender pay gap was found to be prevalent. For example, at Travers Smith women are paid 39% less than the men on average, while at Slaughter & May, they are paid 38% less. Law firms in the UK have only just begun to include equity partners in their mandatory gender pay gap reporting, after criticism arose that firms overlooked them to make their figures look better.
A reason for the large pay gaps is the significant gender imbalance at equity partner level, where earnings often pass the seven-figure mark. About 80 per cent of partners at the top 50 firms are men (according to a 2017 report by PwC).
A second factor that can explain the pay gap in this industry is the fact that a vast majority of secretarial positions in such firms are occupied by women. These tend to be lower paid roles in comparison to the roles of the lawyers and could thus widen the gap further.
While firms are not being punished for having a wide gender pay gap, they will undoubtably suffer damage to their reputation. This of course has an impact on both the standing of the company with clients, but also with potential applicants.
Article written by Natasha D.
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