Divulging pay ratios may become law in the UK
Publish date: 13 June 2018
Issue Number: 240
Diary: Legalbrief Workplace
Category: Business concerned about Draft Climate Change Bill
Large businesses in the UK could be forced to divulge executive pay gaps under new laws being presented to Parliament, amid growing concerns that top-dog pay remains out of touch with that of most workers. People Management reports that under the proposed rules, listed companies with more than 250 UK employees will be required to publish, and justify, the pay difference between their CEO and their average worker, also known as their pay ratio. Businesses will also need to explain how their directors’ actions reflect the interests of their shareholders and employees, what responsible business arrangements they have undertaken and what effect a share price rise could have on executive pay. The report says assuming Parliament approves the measures, they will come into force on 1 January 2019 and companies will need to start reporting their pay ratios from 2020.