By Anuraag Srivastava
Prime Minister Edouard Phillipe introduced an initiative under which companies having more than 200 employees will have to install a software in an effort to reduce the gender pay gap. The software will be linked to the company’s payroll system which would make it easier to monitor. The companies will be given three years to correct the discrepancies in the gender pay gap. Failing to adhere to the new norms would invite a fine of 1% of company’s wage bill. Companies with 50-249 employees would also have to follow the same but they have been given time till 2020 for the same.
A system in place
Gender pay gap in France has been an issue even though a law for gender equality in wages has been in place for over 40 years. This initiative was a result of the 2017 Gender Equality Tour De France in which Marlene Schiappa, the State Secretary for Gender Equality, encountered local best practices in this subject. In France, men are paid 9% more than a woman for the same job. Comparing this to OECD countries, the gap ranges from 36.6% in South Korea to 5.6% in South Korea. France is not the only country to have taken steps to eradicate the gender pay gap this year.
Iceland’s law for the same came into effect this year with equal pay standard being implemented now. However, unlike France, Iceland’s gender pay gap standards add to the bureaucratic burden of the state machinery. The standard introduced by Iceland requires all companies having more than 25 employees to prove that no discriminatory practice is being carried out in their companies by having their accounts audited every three years. The companies will incur a daily fine if they fail to adopt the guidelines. France’s system could be seen as an improved way of monitoring as it is directly linked to the payroll system; thus, avoiding any bureaucratic hassle.
India’s gender pay gap
India has been ranked 108th, according to the World Economic Forum’s “Global Gender Gap Report 2017” which highlights India’s dismal performance. Majority of jobs in India are in the informal sector. According to the 68th round of National Sample Survey Organisation (NSSO) report, India’s gender pay gap in the informal sector declined by 10% from 29.2% in 2004-05. This large gap was reduced primarily due to government schemes like Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS). The construction sector, which is the largest employer in the informal sector, is difficult for women for multiple reasons. There are the difficult conditions of work or sexual harassment that women face in the job, which contributes to a heavily skewed gender pay gap in the informal sector.
The formal sector also does not perform any better. According to the Monster Salary Index prepared by Monster India, one of India’s leading recruitment portals, the gender pay gap has improved by 5% to now stand at 20% in the formal sector. However, for women having 11 years or more experience, the pay gap increases to 25%. Now 69% of India’s corporate employees believe that establishing gender parity should be the top priority for the companies. However, it is just 10% of the companies that have robust gender diversity, signifying an implementation failure despite being considered a priority. Interestingly, 32% of the women mentioned that they are not easily considered for top management roles. However, only 13% men agreed with this notion.
Establishing gender parity
To understand why gender disparity even exists, we need to understand three key points. There is no doubt there exists a significant difference between men and women’s median full-time wages. This implies that women are heavily concentrated in low wage jobs. In other words, the jobs that women have traditionally sought pay less. This, in turn, skews the total gender pay gap. Similarly, there is a decrease in the pay gap due to differences in experience gained between men and women. Women often are forced to leave their jobs or take a break to provide caregiving to their children. This, in turn, puts a halt to their career in a way that men don’t face. This also causes the reduction in work experience which results in harming their potential to secure top management positions, thus skewing the pay gap in the favour of men. One of the ways in which this can be countered is by extending and increasing the maternity benefits and introducing the concept of paternal or parental leave in the Indian system so as to also make men responsible for caregiving. This will result in a reduction of the burden from women’s shoulders of balancing child-rearing with a career.
The third major argument is the prevailing patriarchy in India. Patriarchal norms suggest that the caregiving role for women is emphasised, discouraging them from fully participating in the state economy. In fact, it has been found that as the family’s income increases, after a certain point, there is a trend of women leaving their jobs. Countering and subsequently changing the deep-rooted patriarchy in Indian society is impossible of being done in one day. However, every step taken towards establishing gender parity is a step in the right direction.
More than laws
India has already passed the Equal Remuneration Act 1976 for establishing this parity. However, as we have seen in France’s case, simply passing the law doesn’t provide the desired results. There is a need for concerted efforts to bring about the change. Bringing about this change the way Iceland did would be worse in the Indian scenario as it will only end up adding more bureaucratic red tape to the already existing web. However, utilising the technology and leveraging it to enhance the gender parity in the country like France did could be beneficial in a long run.
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