The gender pay gap is likely to be in the news more often over the coming weeks as new rules that require organisations with more than 250 workers to report on their pay gap come into force.
On International Women’s Day The Ferret identified 28 Scottish public bodies with a gender pay gap greater than the national average.
Some of Scotland’s largest builders, banks, and utility firms also feature among the first organisations to report larger than average gender pay gaps.
What is the Gender Pay Gap?
The Gender Pay Gap is the difference between how much male employees are paid compared to how much female employees are paid.
There is a 16.1 per cent pay gap for all employees in Scotland, compared to 18.4 per cent across the UK.
The gender pay gap for full-time employees in Scotland sits at 6.6 per cent, compared to 9.1 per cent UK-wide.
How is it measured?
There are a number of different ways to measure the pay gap.
The most common measure compares the difference between the average median hourly earnings of men and women employees, excluding overtime.
Both the Scottish Government and the UK Government’s Office for National Statistics (ONS) use this calculation, which is included, among other measures, in the ONS Annual Survey of Hours and Earnings (ASHE) UK employment statistics.
According to the ONS, ASHE reports provide “a snapshot of earnings information in the UK at the survey reference date in April each year.” This snapshot is then calculated in numerous different ways to produce statistics on matters such as the gender pay gap.
Scotland’s long-term trends in gender pay inequality can be seen in the below table from the Scottish Government’s National Indicator, which consists of ASHE figures:
We can see that the pay gap for full-time employees – defined by the ONS as working “more than 30 paid hours per week” (or 25+ in teaching professions) – has declined steeply since the early 2000’s. This decline excludes a rise between 2005 and 2007, fluctuations between 2011 and 2014 and 0.3 per cent increase between 2016-17.
We can also see a measurement for the pay gap between “all employees” – a combination of part-time and full-time employees – which has broadly followed the same trend as the full-time measurement and now sits at 16.1 per cent.
In the below ONS chart, which also uses ASHE figures, we can see the long-term trends of the UK’s gender pay gap:
Despite fluctuations, the UK’s gender pay gap for all and full-time employees has declined over the past two decades.
The figure for part-time employees shows that women are paid more per hour, on average, than men for part-time work. It also follows quite a different pattern to its counterpart measures, and has remained in negative figures since 1998.
However, as the ONS highlights, it should be noted that a far greater number of women work part-time than men (42 per cent compared with 12 per cent respectively – according to the Labour Force Survey.
Additionally, part-time employees tend to earn less hourly, on average, than full-time employees. This difference in the rate of pay disproportionately affects female workers and creates a wider gender pay gap between full-time and part-time employees than the pay gap between full-time employees alone.
Why is the gender pay gap calculated in this way?
The ONS prefers to measure the gap via hourly, rather than weekly pay, as it believes the measurement “better accounts for the fact that men work, on average, more hours per week than women”.
Overtime is excluded as it “can skew the results because men work relatively more overtime than women.” ASHE data also excludes self-employed or employees not paid during the study.
Each ASHE measure of gender-specific pay shows the gap between part-time employees, full-time employees and all employees.
ONS prefers the measure of median as it “is less affected by a relatively small number of very high earners than the mean, and therefore gives a better indication of typical pay.”
It also has various breakdowns including industries, occupations, geographies and age groups.
Why does a gender pay gap exist?
There are numerous reasons why men are still paid more than women.
However, Close the Gap, a charity which works on women’s participation in the labour market in Scotland, believes that the pay gap has three main causes.
Women “being clustered into predominantly female occupations” (such as cleaning, catering and admin) due to “stereotyping about women’s capabilities and skills”. Women are also less likely to be found in senior management roles due to a barrier known as ‘the glass ceiling’.
Lack of flexible working
Women are more likely to have caring responsibilities, they are often unable to have full-time job roles (instead having to take on low-paid part-time work) and can “lose out on pay or promotion, simply for being pregnant”.
Discrimination in pay systems can lead to many women being paid less for work that is the same or similar value to that of male colleagues.
Close the Gap also highlights that women’s experiences of employment can vary depending on their age, sexual orientation, religion, race and other aspects.
What are the rules?
The rules about pay gap reporting, should not be confused with equal pay legislation.
Employers with 250 or more employees must publish and report specific figures about their gender pay gap.
The figures must be calculated using a specific date, called the ‘snapshot date’. The snapshot date each year is:
- 31 March for public sector organisations
- 5 April for businesses and charities
Organisations must publish within a year of the snapshot date, and so every organisation that falls within these rules must publish data by the 5th of April 2018.
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