The gender pay gulf at leading UK law firms will soon be laid bare following a change to mandatory reporting requirements proposed by the government.
Regulations set to take effect before April 2018 are now expected to include partner pay in the calculations which organisations employing over 250 people will be forced to disclose on their gender pay gap.
It had been thought that partners (‘members’) in limited liability partnerships would be excluded, but a government clarification suggests this was an oversight.
Recent statistics show that only about 20% of partners at the top 20 UK law firms are women.
Karen Baxter, employment partner at Lewis Silkin, said: ‘Given the historic gender inequality at the highest levels of the profession, this is likely to have a significant negative impact on the gender pay gap figures that these firms will have to supply.’
The clarification comes in a Government Equalities Office (GEO) response to a request from Practical Law. It is not mentioned in the consultation document Mandatory Gender Pay Gap Reporting, published by the GEO on 12 February.
The clarification ‘significantly widens the scope of the draft regulations as originally understood by many, and means that, for example, LLP members and some self-employed contractors are likely to be treated as “relevant employees” for [reporting] purposes,’ Practical Law said.
Baxter added: 'If they do indeed expand the scope of the regulations in this way, it has very significant implications for firms which do not employ their staff in a separate services company (i.e. for firms where both employees and partners/members are engaged by the LLP).
'For these firms, employees and partners will be added together to determine whether the 250 "employee" threshold is met, and partner pay would need to be included in the published information.’
Baxter also pointed out that the final rules could be be amended to require aggregation of staff across subsidiaries. ‘This would significantly increase the number of law firms that would be covered by the rules,’ she said.
The equalities office said that a consultation on the draft regulations closes on Friday.