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Where Scotland stands on the gender pay gap

Many employers have a nationwide presence but may not be aware of subtle differences in the law applying to the different nations that make up the UK. In the first of a series of articles, here we focus on gender pay gap reporting and the differences in Scotland. 

UK government's approach

David Cameron announced in July that his government is committed to ending "the gender pay gap in a generation". 

The UK government has introduced a number of measures aimed at redressing the balance in the economy, including the new National Living Wage, which will apply across the UK from April 2016. It is thought that the National Living Wage has the potential to reduce the gender pay gap as it is women who are generally in lower paid positions. For further detail on the National Living Wage, please see our previous article. In addition, the government has successfully met its 2011 target of having 25% of women as board members of the FTSE 100 Companies by 2015. 

More notably for employers, the UK government intends to make it compulsory for every company in Great Britain with 250 or more employees to publish the difference between the average pay of their female and male employees. For more detail on the government’s proposals, please see our previous article. The Prime Minister hopes that public disclosure of these gender pay audits "will cast sunlight on the discrepancies and create pressure [needed] for change, driving women's wages up." These changes are expected to be in place by 2016. 

It is not clear what will be required of employers when conducting the gender pay audit, however, there is the potential for employers to manipulate the audit to produce more favourable results. For example, as it is only employees that are intended to be included in the equal pay audits, companies may choose not to include partners or directors when completing the audit.  

Differences in Scotland

The Scottish government has recently published a consultation on improving the diversity of board members and lowering the threshold for public authorities publishing gender pay gap information and equal pay statements. 

The proposals include:

  • Introducing diversity succession planning for board appointments to public authorities in order to more accurately reflect the general population and local communities.
  • Lowering the reporting threshold on gender pay gap and equal pay statements from 150 employees to 20 employees for public authorities. 

The above proposals are in addition to the Scottish government’s 'Partnership for Change' in which private, public and third sector bodies are encouraged to make a voluntary commitment to aim for a 50/50 gender balance on their boards by 2020. 

The Scottish government is also seeking more devolved powers so as to enable it to introduce gender quotas for public sector boards. 

Gender pay reporting obligations

Current position Proposals
Public bodies Private entities Public bodies Private entities
England and Wales Voluntary Voluntary Compulsory for all companies with 250 or more employees Compulsory for all companies with 250 or more employees
Scotland Compulsory for public authorities with 150 or more employees Voluntary Compulsory for public authorities with 20 or more employees UK provisions would apply (compulsory for all companies with 250 or more employees).

What does the future hold?

It is clear that closing the gender pay gap is of key political importance for both for the Scottish and UK governments. This area has also garnered increased public support and media attention. 

To prepare for these up-and-coming changes, employers are encouraged to conduct internal equal pay audits to assess the impact of these changes in advance of any regulations coming into force.  

Employers may also wish to consider instructing their solicitors to advise on any equal pay audits to minimise any potential risks and also to gain the protection of legal advice privilege. 

We have expertise in Scottish employment law issues, with offices in Edinburgh and Glasgow. Get in touch if you would like to discuss any matters affecting your business with us.

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at October 2015. Specific advice should be sought for specific cases. For more information see our terms & conditions on www.TLTsolicitors.com

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