(Bloomberg) -- The U.K.'s gender pay gap has “no teeth” because employers aren't forced to explain how they will address the problem, a study found.
The country ranked joint bottom of six countries analyzed because its rules could go further in ensuring companies close the disparities, the study by King's College London's Global Institute for Women's Leadership and the Fawcett Society found.
Gender pay gap reporting became mandatory in the U.K. in 2017 and has provided an insight into how far women's earnings lag behind those of men. A sample of 10 large investment banks shows women earned 56 pence for every pound that men earned when comparing their average hourly pay in April 2020.
U.K. Investment Banks Pay Women 56% of What Male Colleagues Make
The figures don't measure the pay of men and women doing the same job, but the difference between all wages of male and female staff at a particular firm.
The study published Friday analyzed the strength of the reporting system through which companies are obliged to disclose their gender pay gaps. In addition to the U.K., researchers looked at gender pay gap reporting systems in Australia, France, Spain, Sweden and South Africa. Australia ranked joint bottom with the U.K. while Spain was ranked first.
The report praised the U.K. system's transparency, as all reported information is publicly available on a government-run website. By comparison in Sweden, companies are not required to report their pay audits or submit information to a government body.
To improve its ranking, the authors suggested a legal obligation for firms to publish action plans on how they plan to address the pay gap. That's what employers are required to do in Spain and France, the countries given the highest overall ratings in the study.
Other recommendations included the introduction of automatic fines for non-submission of reports and the lowering of the minimum employee threshold for reporting gender pay gaps. It's currently at 250, which the researchers say “lies well above” the other countries surveyed -- in Sweden, the threshold is 10 employees, and Spain, it is 50.
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