Businesses ‘still failing to address maternity pay penalties’



Pay parity approaching for women in their 20s, new figures suggest, but gap remains significant after childbirth

Female employees in their twenties have seen a significant narrowing of the gender pay gap over the past two generations and are now paid 5 per cent less than men, according to a new report from the Resolution Foundation. But the findings suggest there has been little progress in tackling systemic issues that see women fall behind men in terms of earnings and career progression after having children.

The report, based on ONS statistics released in 2016, found that millennial workers born since 1981 faced a gender pay gap of only 5 per cent compared to the 16 per cent experienced by the ‘baby boomer’ generation born between 1946 and 1965 when they were in their twenties.

“[The figures] show that the gender pay gap has closed for every subsequent generation of women,” said Laura Gardiner, senior research and policy analyst at the Resolution Foundation. “This reflects positive trends, including rising higher educational participation, which women in particular have benefited from, and more women breaking into high-paying industries and occupations.”

But the report also demonstrates that female employees remain likely to experience a sharp rise in the gender pay gap after the age of 30. Millennials aged 30 are subject to a gap of 9 per cent – a figure that has barely changed in a generation. This suggests, experts said, that businesses are still failing to address issues of pay and progression once women take on childcare responsibilities or re-enter the workforce after having children.

“Interestingly, if you look at the ONS statistics, between the ages of 30 and 39 the gender pay gap is reversed for part-time workers, with women making more than men,” said Charles Cotton, performance and reward adviser at the CIPD. “This is probably because of the fact that so few men work part time, which leads us back to the social issue of why women still hold the chief responsibility for childcare. It could be that with the introduction of policies such as paid parental leave, there will be a shift in social responsibility, and we will see more men working part time so that gap will narrow.”

Cotton credited equal pay legislation with ensuring younger workers enjoyed increasing pay equality. And he said the introduction of mandatory gender pay reporting in April could prove a crucial tool in highlighting the issues, as organisations with more than 250 employees will be under pressure to explain the difference in salary between their male and female workers.

“It could provide useful information on whether the gender pay gap is grounded in the ways women are recruited and promoted through an organisation, childcare opportunities, and flexible or family-friendly work practices,” Cotton said.

Gardiner added: “While we should celebrate generational gender pay progress, a continued focus on gender differences at all stages of careers – and in particular action to address the sharp and long-lasting earnings penalty post-childbirth – remains a key challenge of our times.”

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