UK’s Gender Pay Hole Information May Be Fallacious 

The Workplace for Nationwide Statistics (ONS) might need been constantly underestimating the UK’s gender pay hole by one proportion level since 2004, a brand new report suggests.

Over the financial institution vacation, the British Journal of Industrial Relations (BJIR) shared findings that recommend the ONS could have been overly-reliant on payroll knowledge from giant companies in its Annual Survey of Hours and Earnings (ASHE).

The paper reveals how this has skewed the outcomes of the ASHE for the previous 20 years, and doubtlessly influenced how policymakers, employers, and the general public perceive progress towards pay equality.

What’s the UK’s gender pay hole?

The gender pay hole refers back to the distinction in earnings between women and men workers. In 2024, the imply gender pay hole for full-time workers was 7.0%, that means on common, ladies earn 93p for each pound that males earn.

Since information started in 1997, the gender pay hole has been closing. However the BJIR report suggests we’d truly must take a step again in 2025, because the ONS course corrects on what could have been a flawed methodology.

When gathering its statistics from corporations, the BJIR alleges that the ONS didn’t correctly have in mind that the majority of its knowledge got here from massive corporations, the place the gender pay hole is narrower. In smaller companies, ladies are sometimes paid much less and underrepresented.

The BJIR findings had been first reported by the Monetary Occasions. In accordance with the Monetary Occasions, the ONS stated the ASHE survey was beneath assessment, and that a few of the points raised within the report had already beforehand been addressed.

“Weighting schemes are only one facet of the methodology of a fancy survey comparable to Ashe, and we usually scrutinise these strategies to make sure they proceed to be related and aligned to finest follow,” the ONS stated.

Nevertheless, this isn’t the primary time that the federal government physique has confronted accusations of sharing flawed knowledge. In October 2023, the ONS suspended its month-to-month Labour Power Survey (LFS) resulting from issues about knowledge accuracy. This suspension lasted till February 2024.

Incoming pay hole knowledge legislation adjustments

Belief within the authorities’s earnings knowledge can be paramount forward of incoming adjustments to pay hole reporting, that are set to return into drive from subsequent yr.

Giant employers can be requested to create motion plans on addressing gender pay gaps, at first on a voluntary foundation, earlier than being made necessary in October 2027. 

In June, the federal government launched a session on extending current pay hole reporting legal guidelines to require giant employers (these with 250 or extra workers) to publish knowledge on incapacity and ethnicity pay of their organisations.

It’s hoped that these legislation adjustments will enhance pay transparency within the UK. However, if the BJIR is to be believed, the ONS would possibly must get its personal home so as first.

Dependable knowledge issues in right this moment’s labour market

The ASHE survey is used to provide complete statistics on the earnings, hours, and gender pay hole within the UK for workers. Its findings are generally used to tell choices associated to pay and dealing circumstances, together with over the long run stage of the minimal wage.

The reliability of those statistics matter not solely to policymakers but additionally to employers and employees navigating an more and more tough labour market. 

Within the hospitality sector alone, 4% of jobs have reportedly been misplaced because the Finances, partly as a result of employers have struggled to soak up rising prices from greater minimal wages and Nationwide Insurance coverage contributions, set by policymakers.

Forward of adjustments to pay hole reporting within the forthcoming Employment Rights Invoice, the demand for reliable wage reporting has by no means been better. With out it, corporations could find yourself making choices on incomplete or deceptive proof.