New rules on gender pay gap reporting which came into force on 6 April aim to encourage equal pay in the workplace, but there are still question marks over how effective they will be.

In broad terms, the legislation will require employers with 250 or more members of staff to publish online the average salary and bonus figures for men and women within their organisation. Currently within the North East, there are around 338 companies with a turnover of more than £36m that meet the criteria, with the largest percentage of organisations in the Tyne and Wear area.

The new rules aim to address the imbalance in pay between men and women in the workplace. The Office for National Statistics has reported that although the national median gender pay gap for full time employees has narrowed over the past two decades from 27.5 per cent to 9.4 per cent, men still have a pay advantage over women.

Private and voluntary sector organisations in scope will have to publish their gender pay gap reports on their own websites as well as on a government website no later than 4 April 2018. The data should include hourly pay rates and bonus figures starting from the period 6 April 2016 to 5 April 2017. The reports will have to remain online for a period of at least three years.

Commenting on the new rules, Jackie Hall, RSM tax partner, head of employment taxes for the North East and Yorkshire, said: ‘The positive challenge of these new rules is to raise awareness of any gender pay gap in the workplace with a view to ensuring that men and women are equally recognised for their contribution to the business.’

‘That being said, whilst the legislation should, in theory, improve business transparency and gender equality, there are currently no formal penalties for non-compliance or for publishing inaccurate information.’

‘In addition, the published data won’t always be sufficient in painting an accurate picture of whether there is an imbalance in pay between men and women doing exactly the same jobs, as the figures will be an annual listing of numerical averages, accompanied by vague narrative summaries.’

‘What these rules will likely do is impose a reputational risk on those businesses who either fail to report or fail to adequately explain any gender pay gap; whether they lead to positive change to address that imbalance, only time will tell.’

‘Due to the close-knit nature of the north east market, these changes in legislation will hopefully only encourage businesses to be as transparent as possible, so as to not miss out on the best talent in the market. Failure to do so could also mean risking current talent due to confirmed inequality within the business ’.