Breaking the final taboo – secrecy around salaries
Very few subjects seem to be taboo these days. People talk about death, and sex, and how much their car cost. But one of the last areas of secrecy – how much salary people are paid – could be about to fall.
A new piece of legislation has just been passed through parliament and is now going forward for Royal Assent. The Equality Act will begin to come into force from October this year. There is much of interest on this new law (some of which I will explore in further blogs), but today I’m looking at the issue of reporting on equal pay, and banning the secrecy around salary structures.
- Image by catmachine via Flickr
The law will allow the government an option to require companies employing more than 250 people (150 if it’s in the public sector) to report on their gender pay gap from 2013, if enough progress on this has not been made voluntarily. Currently the pay gap stands at around 17% for full time workers. One of the problems is that it is often difficult to find out how much people earn, and therefore to determine if there is a gender pay gap in any particular case.
To try and address this, further measures in the new legislation include banning the employers’ ability to use employment contracts to prevent staff talking about their wages. At the moment, nearly a quarter of employers don’t allow their staff to discuss their salaries, and the government hopes lifting this will enable more women (and men, in some cases) to challenge unlawful pay.
I understand there may be a perceived correlation between someone’s salary and their sense of self-worth, but why is it considered so bad for this information to be made public? The salary scale is attached to the job role and its value to the business, not the worth of the post-holder.
What do you think? Should businesses be open about the salary scale attached to roles within the company?
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8 Responses to Breaking the final taboo – secrecy around salaries
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I think businesses definitely should be open about the salary scale attached to roles within the company. All this stuff about protecting employees' sense of self worth is hot air used by employers to keep salaries secret and hide the discrepancies of gender pay gaps.
Twitter: SuzeStMWrites
i still dont understand why the law cant come to force immediatly, why to wait till 2013??also why the law applies organisations that employ over 250 employees (or 150 public sector) what about those who work for small businesses etc…
my mind cant comprehend why there is gender gap in payment in first place?? and why our nany state cant inforce a law of equality???
Absolutely.
A company will only hide the salary scale if they have something to hide.
My last corporate job gave me the same salary scale as everyone else with that same job title, I also had performance related bonuses. This meant that I earned 4 times us much as a man in the same position, nothing to do with my gender and everything to do with my performance which was measured against strict targets.
A man is no longer the provider, and should not earn more merely based upon his gender but upon his ability to achieve the KPIs of his job function, no more, no less.
I agree Sarah – pay should be on merit alone. Oddly, when I have conversations around the idea of salary disclosure, generally speaking women are all for it and men against it (yes, there are exceptions, but there is a definite pattern!)
Twitter: evenbreak
Oh, the Equality Bill: Harriet Harman's realisation of Chairman Meow's Little Red Book. It's mostly good and right, but there's some mad stuff as well: like having to employ pregnant women – have you seen the insurance quotes, or even thought about the “where there's a blame, there's a claim” lawyers: YUCK!
An open pay structure and publication of the pay policy is right. It works in small companies where the water cooler conversation means that personal pay is not, as everyone shares to make sure they are valued; while in larger companies it is rightful HR policy. The problem is in the middle, with the 25+ to 120 employee companies: is it personal or policy?
Seems daft that women are not on equal pay so many years after equal rights legislation, and more that pay should be based on achievement over gender: but it ain't in reality, hence the need for an additional piece of legislation. I wholly support pieces of legislation like this, as it makes us more competitive as a country – but we really do need to think about the stuff where individuals could make more choice over what they do/do not accept, than a nanny state + slap the legislative paperwork at it.
Could you link to the pay gap discrepancy?
Hi Joy-Mari,
Yes, sorry, should have mentioned the source. Figures vary from 11% to 50%, but most reliably is around 17%. Some links here:
http://www.channel4.com/news/articles/business_…
http://www.guardian.co.uk/money/2009/oct/30/gen…
http://www.personneltoday.com/articles/2009/10/…
Hope this helps.
Twitter: evenbreak
Thanks, Jane. Only saw this now.