Salary history bans have proven impact

TRANSPARENCY on pay has come back into focus with the announcement last week that the Government is launching a pilot programme in which participating employers will be barred from asking recruits about their previous salary history.

Fronted by the UK’S Minister for Women, Baroness Stedman-scott, the initiative will also require organisations to list salaries on their job adverts. The measures are aimed at bringing an end to “ambiguous pay policies and historic pay decisions” that keep women, people of colour and the disabled chained to past pay discrimination.

Government officials will analyse results from the study, which will last between six months and a year, to see if the programme has helped boost the pay of 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 roughly three dozen states and municipalities have adopted some form of legislation in this area. Research suggests these bans have reduced the gender pay gap by two percentage points in areas where they have been enacted.

The Fawcett Society, which has long campaigned for non-disclosure on salary history in the UK, says the US experience proves this is a “simple, evidence-led way” to eliminate embedded bias. It is calling on employers to answer the Government’s call and commit to better salary transparency in the recruitment process.

As of the beginning of this month, less than a quarter of UK firms that are required to submit their gender pay gap data to the Government had done so. This information is to be filed by April 5 following a reporting hiatus during the worst of the Covid pandemic.

The absence of that data and the distorting impact of furlough payments has made it difficult to get a grasp on the direction of travel, but many believe progress towards equal pay has been set back by the pandemic. Numerous studies during the past two years have shown women’s financial security has been hit harder by lockdowns, furlough and job losses than that of men.

Progress towards gender pay parity was already dismally slow prior to

Covid, with the Fawcett Society predicting in 2019 it would take another 60 years to eradicate the gap in the UK.

If further ground has indeed been lost, yet another generation of young women look set to be cheated out of the financial parity first promised by the original Equal Pay Act more than five decades ago.