Salary history bans have proven impact

Pay transparency returned to center stage with the announcement last week that the government is launching a pilot program in which participating employers will not be allowed to ask recruits about their salary history.

Led by UK Women‘s Minister Baroness Stedman-Scott, the initiative will also require organizations to list wages on their job advertisements. The measures seek to end “ambiguous wage policies and historic wage decisions” that keep women, people of color and people with disabilities shackled to past wage discrimination.

Government officials will analyze the results of the study, which will last between six months and a year, to see if the program has helped raise wages for women and ethnic minorities.

The first so-called salary history ban was passed in the US state of Massachusetts in August 2016, and since then, about three dozen states and municipalities have passed some form of legislation in this area. Research suggests that these bans reduced the gender pay gap by two percentage points in areas where they were enacted.

The Fawcett Society, which has long campaigned for the non-disclosure of UK wage history, says the US experience proves it is a ‘simple, evidence-based way’ to eliminate built-in biases. It calls on employers to respond to the government’s call and to commit to greater pay transparency in the recruitment process.

By early March, less than a quarter of UK businesses required to submit their gender pay gap data to the government had done so. This information must be filed by April 5 following a hiatus in reporting during the worst of the Covid pandemic.

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The lack of this data and the distorting effect of furlough payments has made it difficult to understand the direction of travel, but many believe progress towards equal pay has been delayed by the pandemic. Numerous studies over the past two years have shown that women’s financial security has been hit harder by closures, furloughs and job losses than men’s.

Progress towards gender pay parity was already miserably slow before Covid, with the Fawcett Society predicting in 2019 that it would take another 60 years to close the gap in the UK. While ground has indeed been lost, another generation of young women looks set to be deprived of the financial parity first promised by the original Equal Pay Act more than five decades ago.

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