Pay gap also affects men as gender still decides job roles

The biggest gender pay gap in the country is at a chain of nursery schools in Hampshire. Male employees at Yellow Dot Nursery are paid 81% less than women on the median average. That means that men earn 19p an hour for every pound that women earn.

While the vast majority of British companies have been found to be paying women a lot less than men, there are examples of the inverse problem. A century after women first won the right to vote, society still views some roles as jobs for the boys and others as women’s work.

Critics argue that using the median average pay gap – taking the mid-point when all wage rates are lined up from the biggest to smallest, to reduce the impact of one-off outliers – is a crude measure.

However, Peter Cheese, chief executive of the Chartered Institute of Personnel and Development, the professional body for HR managers, said the gender pay gap reporting order from Theresa May was “revealing some challenging truths and insights about where the real differences and issues lie in achieving sustainable change in gender balance across organisations of all kinds”.

Cheese added: “It is often said that sunlight is the best disinfectant. The increased transparency that gender pay reporting has brought has further fuelled the important public debate about how we’re supporting different groups in society towards fulfilling, fair and rewarding opportunities and work for all.”

Banks are among those with the biggest gaps, with Barclays International (the investment banking arm) reporting a 43.5% median pay gap in favour of men. At Goldman Sachs in the UK, the gap is 36.4%; it is 36% at JP Morgan and 30.5% at Bank of America Merrill Lynch. The national average median pay gap is 18.4%.

Goldman’s chief executive, Lloyd Blankfein, said the bank was a “meritocracy” that promoted the best people regardless of gender: “The real issue for our firm and many corporations is the under-representation of women.”

In its filing with the Government Equalities Office – which every organisation with more than 250 staff must make by 4 April – Yellow Dot said it was “committed to fairness, equality and inclusion”, but conceded that it has a big gender pay gap, which is getting worse. The median gap in 2016 was -30%; it rose to -81% in 2017 because the company encouraged men to join the business but in low-paid positions. An employee at the company said Yellow Dot’s founder, Jane Dyke, was “not interested” in speaking about the problem.

Other organisations that may have a reputation for being male-dominated have been found to have big pay gaps in favour of women. The Jockey Club, which owns 15 of Britain’s racecourses, pays women 23% more than men on the median average. The company said that nearly all its lower-paid ground staff were men. The Royal British Legion pays women 23% more than men.

The Crown Estate, which manages a vast collection of property assets on behalf of the Queen, is the biggest company with a large pay gap in favour of women. Alison Nimmo, its chief executive, explained that the -31% median gap is caused by women occupying three out of four of the top executive jobs, and the company employing hundreds of lower-paid men in manual jobs on the Windsor estate.

At the other end of the spectrum, a scaffolding and industrial services firm in Essex has reported a mean pay gap of 106.4% – a mathematical impossibility unless women were forced to “pay” £6.40 for every £100 earned by men.

A spokeswoman for Rainham Industrial Services was unable to explain the figures but said: “We have very few women. We have about 500 scaffolders – it’s not really the sort of job women apply for.” She said the company had done “nothing” to encourage women to consider scaffolding jobs.

The company that last week appeared to have the highest pay gap at the expense of women was the Manchester-based luxury soft furnishing manufacturer Rectella, which at one stage reported that it paid women 88% less than men on the median average.

The Observer visited Rectella on Thursday to find out why. Employees at the family-owned firm weren’t particularly pleased to see our reporter. Laura Walker, Rectella’s payroll coordinator, emerged briefly from her office, only to state: “We’re not commenting, I’m afraid. We close at four. Sorry.”

By Friday morning Rectella had refiled its figures. Its median pay gap has shrunk to 39.6% – still much higher than the national average.

• The median average pay gap at Observer and Guardian publisher Guardian News & Media is 12.1%

Equality after a fashion

Womenswear brand Phase Eight has one of the biggest gender pay gaps in the country, with its filing revealing that it pays women 54.5% less than men on the median average and 64.8% on the mean.

Phase Eight’s chief executive, Benjamin Barnett, said the company believed strongly in pay equality, and the data “does not reflect the true story and culture within the Phase Eight business”. As a womenswear retailer, Barnett said, it was in a tricky position: almost everyone who applies for a job on the shop floor is female, and frontline retail staff are paid a lot less than those in the head office.

The company employs only 44 men out of a workforce of 1,754. All but five of those men work in the corporate head office, “where standard pay rates (including ours) are typically higher”. Women make up 99.7% of the workforce at all pay quartiles at the company, except the highest-paid, where 90.3% are male.

Other fashion retailers appear to have overcome the problem and report more equal pay between genders. Next reported a median pay gap of 1.7% and Zara 1.1%. Primark said it had no pay gap at all, measured on the median average.

Like Phase Eight, Primark said it had “significantly more” female than male employees. But the male roles were spread out across the pay structure, with men making up 24% of the lowest-paid employees and 38.3% of the highest.

Does the data miss the mark?

Theresa May announced reforms requiring all UK companies with more than 250 staff to report their gender pay gaps, in the hope that sunlight would prove the best disinfectant and encourage firms to close the 18.4% gap between what women take home compared with men. The gap equates to women working for free for the first 67 days of the year.

The regulation, which requires companies to report their mean and median hourly pay gaps – as well as discrepancies in bonuses and the proportion of women at the low and high ends of their pay scales – by 4 April, is the most comprehensive gender pay data collection exercise ever attempted worldwide.

The law was enacted last year, after a 2010 measure to encourage companies to report their data voluntarily failed to gain traction. Now, failure to respond will result in fines and sanctions by the government’s Equality and Human Rights Commission. However, about 2,000 of the estimated 9,000 required to file their data had yet to file by Friday.

In the US there is no law requiring companies to analyse their pay data. President Barack Obama had introduced a rule to force big firms to publish data based on gender and race, but his successor, Donald Trump, scrapped it last year. According to the Organisation for Economic Co-operation and Development, the US median pay gap is 18.1%, against 16.8% (by its measure) in the UK. South Korea tops the table, with a 36.7% gap, while Luxembourg and Costa Rica have reduced their pay gaps to 3.4% and 1.8% respectively.

While campaigners have welcomed May’s efforts to push pay inequality up the agenda and capture newspaper and TV headlines, they have questioned the value and validity of the data.

Kate Andrews of the free-market thinktank the Institute of Economic Affairs said the exercise was “worse than useless”, as the data required by the government did not compare like-for-like jobs, qualifications or full- and part-time workers.

“[The reports] not only fail to tell us anything meaningful about pay discrepancy between men and women in the workplace,” she said. “They have also produced a huge influx of misleading statistics that undermine well-meaning companies and threaten jobs for women.”

Andrews said the legislation could inadvertently encourage companies to hire fewer women in junior roles. “The government’s pay gap analysis may be the most comprehensive carried out by any country, but it has delivered completely unusable – and worse, misleading – data.”

There has also been criticism of law and accountancy firms, many of which first reported their data without including the pay of partners, who they argued were owners rather than employees. Accountancy firm EY first reported a gap of 19.7% before revising it up to 38%. Large companies have also been able to report figures for several smaller entities within the overall group, which makes finding a single overall figure very difficult.

The best and worst

AIRLINES

Worst Jet2.com

(median 49.7%, mean 53.5%)

Best British Airways

(median 10%, mean 35%)

BANKS

Worst Goldman Sachs

(median 36.4%, mean 55.5%)

Best Barclays UK

(median 14.2%, mean 26%)

But Barclays’ investment banking arm had one of the biggest gaps

MEDIA

Worst Telegraph Media Group (median 23.4%, mean 35%)

Best Channel 5

(median 2.1%, mean -2.9%)