Small construction firms may have to report gender pay gap

Small construction companies may soon have to report their gender pay gap under new proposals from MPs.

Parliament’s Business, Energy and Industrial Strategy Committee has recommended that smaller companies with over 50 employees should publish annual gender pay gap data from 2020. 

Currently only firms with more than 250 employees have to report their gender pay gap.

MPs also said that flexible working at senior levels should be encouraged more, along with stretching targets for chief executives to make them accountable.

Construction was one of the worst performing sectors of industry when gender pay gap figures were released earlier this year. 

• How is construction dealing with the gender pay gap?
• Women earn up to 62% less than men in construction

The Committee has published a report on gender pay gap reporting, which recommends companies be required to publish action plans and narrative plans on what they are doing to close the gap each year as part of normal reporting requirements.

It said while median pay across the country is 18% in favour of men, at an organisational level, recently published figures from large firms reveal some "alarming truths" with gender pay gaps of over 40% not uncommon in some sectors and 78% of organisations reporting gender pay gaps in favour of men.

Among the UK’s top 10 contractors (by turnover), women are paid an average of 30% less (on a median basis) than their male counterparts.

Meanwhile, across all 349 construction employers who have made their figures publicly available, the median pay gap is reported to be 23.6%.

Only half of workforce currently affected

The Committee of MPs also highlighted the fact that only around half the members of the UK workforce are expected to be covered by the present reporting requirements and that the pay gap was likely to be higher in smaller businesses.

Rachel Reeves MP, chair of the Business, Energy and Industrial Strategy Committee said: "Transparency on gender pay can only be the first step. The gender pay gap must be closed, not only in the interests of fairness and promoting diversity at the highest levels of our business community, but also to improve the country’s economic performance and end a monstrous injustice.

"A persistent gender pay gap shows that companies are failing to harness fully the talents of half the population. The penalties of working part-time, both financial and in terms of career progression, are a major cause. Companies need to take a lead. For example, why aren’t they offering flexible working at senior levels? They must look at why they have a pay gap, and then determine the right initiatives, policies and practices to close it. Chief executives should have stretching targets in their Key Performance Indicators and be held to account for any failure to deliver. Our report recommends that the Government requires all organisations with over 50 employees to publish annual gender pay gap data from 2020.

"The Prime Minister spoke about the ‘gender pay gap’ as a ‘burning injustice’ and of closing the gap for good within a generation. It’s now time for the Government and businesses to deliver on that ambition."