The gender pay gap remains a stubborn problem and one that can be mysterious to understand, detangle and then set about solving.

This is part of the Government's motivation for introducing mandatory gender pay gap reporting – so that companies can pull together some statistics in order to try to identify how big a problem they have in this respect and set about identifying the reasons, and potential solutions, for it. A number of companies have voluntarily complied with mandatory gender pay gap before next April's deadline. You can go onto the Government Gender pay gap viewing service to look at those.

It seems likely that motherhood (and perhaps the potential for motherhood) plays a large part in the reason why, on average, female employees continue to earn less than male employees.

Large and/or wealthy businesses have often sought to address this by offering generous enhanced maternity leave packages in order to attract and retain talented female employees. Far fewer employers offer enhanced pay for paternity or shared parental leave for partners – or, if they do, this is often at a lower level than that offered to those taking maternity leave.

When Shared Parental Leave was introduced, the Government was categorically of the view that there was no legal obligation on employers to match enhanced rates of pay for parents taking Shared Parental Leave. Whilst there has been no binding decision otherwise yet, there has been a recent first instance decision in an Employment Tribunal which found that it was direct sex discrimination to deny a father paid leave at the same level of its enhanced maternity pay. This goes against a previous decision on more or less the same point (which relied on the legislative carve out which says it is not discriminatory to afford special treatment to women in connection with pregnancy and childbirth).

On the face of it, many women would consider that good enhanced maternity packages are a positive thing, but:

  • Does this reinforce the stereotype that women should be the ones doing the majority of the childcare?
  • Given women on average are more likely to already be earning less than their male partner, doesn't enhanced maternity pay (in a situation where the other partner does not have access to enhanced pay) make it even more likely that in most childcare scenarios a couple will opt for the person entitled to enhanced maternity pay to do the lion's share of care?
  • Does that perpetuate the potential impact that periods of leave can have on a woman's career?
  • Does it sit at odds with the stated intentions of Shared Parental Leave which are to create a more equal system enabling businesses to make the best use of women's talents whilst allowing fathers to have a greater involvement in raising their children?

A recent article by Retail Week highlighted the fact that Shared Parental Leave has had an uptake of just 5% by new fathers since it was introduced in April 2015. By contrast, according to that article, the company Etsy which introduced a global policy offering 26 weeks of full-pay time off to new parents regardless of gender has seen this taken up  by equal numbers of male and female employees.

Many commentators argue that there just isn't enough money in the pot to give more generous entitlements to pay to all – especially where smaller employers are concerned. The Bright Blue commission has already proposed a cut in statutory maternity pay offered from the Government to better paid employees in order to improve statutory maternity pay offered to employees on lower pay as well as a novel plan for university-style loan to help employees pay for childcare for under 5s ( See the Guardian article - maternity pay tories plan take from rich to help poor).

Is it time for the Government to require equality in terms of pay for time off to care for new children? Will we eventually see a move towards the Swedish model of giving both parents an equal entitlement to time off paid at the same rate? Or will the courts end up doing so within the legislation as it already exists?

If you would like to discuss your current maternity, paternity and or shared parental pay schemes or gender pay gap reporting and how they fit with your recruitment and retention aims please contact James Collings, partner, or Charlie Maples, senior associate.