Ifty Nasir, Founder and CEO at Vestd explains what the new Employment Rights Bill means for pay equality and the steps employers can take to create equality across their business.
The new Employment Rights Bill, set out in the King’s Speech, has been met with a mixed response. While some believe it paves the way for equality and protection for employees, others are worried about whether it will make it difficult for businesses to operate effectively.
The new legislation would make parental leave, sick pay, and protection from unfair dismissal a day one right for all workers, helping to improve equality and business culture in the UK.
However, the ban on zero hour contracts and introduction of flexible working from day one are policies that could impose financial and technical difficulties for employers, despite the positive impact they could have on the gender pay gap.
Although we’re still waiting to hear the specifics about how the new laws will play out, it has brought into focus questions around equality and equity in the workplace.
The gender pay gap is a case in point
While it wasn’t explicitly mentioned in the King’s Speech, it is hoped the new measures will go some way to closing the gap which currently stands at 14.3 percent. Data shows that it has fallen by a quarter over the last decade, but the newly formed Labour Government wants to see it closed faster.
The reasons behind the gender pay gap are complex, and can’t be solved overnight. Data shows that women are seven times more likely to be out of work because of caring responsibilities when compared to men. Working mothers are also twice as likely to ask for flexible working arrangements, which can make them less available for meetings or travel, and less visible generally in the workplace.
Research also reveals women are less likely to put themselves forward for promotions, and one contributing factor could be struggling to balance the extra responsibility with their home life.
The Government’s solution to tackle inequality, as set out in the King’s Speech background briefing notes, promotes flexibility and protection for all workers, with greater scrutiny to ensure the rules are followed.
Flexible working is now the default
Whether it’s working from home, compressed hours or flexitime, HR teams need to seriously consider flexible working requests made by employees. They can review existing policies, get feedback from teams and introduce a standard flexible working policy for all employees.
Research shows a ‘motherhood penalty’ with around 250,000 mothers leaving their jobs due to childcare pressures. The new laws could mean it won’t only fall to women to put in requests for flexible working due to caring responsibilities; it encourages men too. As a result, we could see it made it easier for women to take on more responsibility and reach their full earning potential.
Greater scrutiny
If employees raise claims of unfair treatment or inequalities in pay, there will be more serious consequences for employers.
A new Fair Work Agency is being formed to improve the enforcement of workplace rights, so employers can be directly fined or prosecuted by the agency. It’s up to HR teams to check for unfair discrepancies in pay, promote transparency and conduct regular pay reviews.
What steps can employers take to ensure equality?
With the new legislation, employers have a greater responsibility to improve equality across the workplace. Key to closing the gender pay gap is offering more flexibility and choice to employees whatever their role or background is.
That means being more open to solutions like hybrid working, flexible start and end times, and possibly a four-day week where practical and realistic. Not only will reviewing your flexible working policies put you in good stead before the changes come into effect, you have time to get feedback from your teams and build a solid policy that works for all.
Businesses should also aim to introduce policies that improve equity across the workplace. Not everyone will be on the same salary – that’s dependent on skills and experience. But an employee share scheme gives everyone a chance to be rewarded for the contribution they make, while encouraging them to innovate and progress in their careers.
Perks like share schemes can help all employees earn extra income and have a safety net. They can also be particularly valuable for women. A YouGov survey found that women were less likely to ask for a pay rise compared to men, with 60 percent never having asked. Offering employees a stake in a business gives way to the ‘ownership effect’, improving retention rates and driving motivations to achieve goals.
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Ifty Nasir is Founder and CEO at Vestd.
