Catherwood LibraryILR School

By the end of today’s date, April 4, Britain will have required all businesses with more than 250 employees to report pay discrepancies between male and female workers as they actually exist, without the use of control variables that may whittle the appearance of pay disparity. The 2017 law will affect approximately 9,000 companies and 15 million employees, with companies required to report unadjusted mean and median hourly wages, bonus pay for all employees, as well as percentages of men and women in each pay quartile. Without strict legal guidelines, most companies would prefer to analyze their salary data within strict parameters. Microsoft, for example, had reported in 2016 that women employees were paid 99.8 percent of what men working in the same roles at the same level received. The number didn’t show whether women were assigned to the correct pay level or were promoted as often as males. Princeton University economics professor Henry Farber had analyzed the data provided in a 2015 pay disparity lawsuit against Microsoft and found that, in contrast to the company’s claimed 0.2%, pay disparity occurred at 2.8% for people with the same job title; 6.3% when accounting for all previous factors within a department; 7.4% when accounting for age, tenure, location, and performance; and 8.6% when based on gender alone. Farber believes that the strict reporting required by the British law will, even if limited to U.K. work forces, provide insight into company structures around the world - revealing that higher paid divisions are dominated by males, and that women’s careers move slower, peak at a lower level, and ultimately pay a lot less than men’s careers.