Analysis: What will UAE gender pay law really change?

New public sector rules will equalise remuneration, but deep challenges remain among private businesses, say experts

The UAE government recently implemented an equal pay law for men and women in the public sector. It follows high-profile moves in the UK and elsewhere to document, explain and eventually eradicate any gender pay gap. But in many senses, the hard work for HR has only just begun.

The formation of a Gender Balance Council in 2015 and the launch of the Gender Balance Guide in 2017 have gone some way to helping the country climb the ranks to second place in the Middle East for 'wage equality for similar work'. But on a global level, the UAE lags well behind in terms of gender parity.

Sara Khoja, partner at Clyde & Co in Dubai, says that a key aspect of the law’s impact in the public sector is that basic pay and allowances between men and women across the board must now be equal, including retirement pay and contributions, and the ability to make additional contributions.

The Labour Law for the private sector (Law no 8 of 1980) has contained an equal pay provision for a long time now – article 32 provides that a man and a woman performing the same work should receive the same remuneration. “The new legislation doesn't oblige private sector employers to do any gender pay reporting or gap analysis,” adds Khoja.

Professor Chris Rowley of Kellogg College, University of Oxford, says the move represents an important and significant step in the right direction as it represents a public statement of intent. However, he sees enforcement as a challenge – as has been shown in many economies which have to introduce such legislation in practice. “For example, the UK has had equal pay laws for nearly half a century yet inequality remains, as seen in the need for the new gender pay gap reporting regime, the most comprehensive in the world,” says Rowley.

And most experts agree women are not being paid equally in the same role across every sector in the UAE. “There is disparity when it comes to pay, promotions and hiring,” says Graham Boyle, director – human resources and talent at Global Executive Consulting. “There is disparity when it comes to pay, promotions and hiring. There’s a legacy of women being paid less than men and companies are slow to address this. Multinationals should be leading the way in bridging the gap, but too often the programmes they create are used more as a marketing tool than to address the problem.

“There is disparity between male and female hiring and the grade levels they are hired for despite equal experience and qualifications. Changes are being made to tackle the issue, however changing attitudes toward gender pay inequality is difficult when sometimes the people who are making decisions that will have an impact on hiring or salaries are unaware of their bias toward paying male employees more,” adds Boyle.

Research from Korn Ferry shows that the vast majority of organisations in the UAE actually do not differentiate salary policies by gender. However, differentiation does exist due to some specific allowance and benefits policies which favour female employees in some organisations – for example, housing allowance and related benefits are not always paid to female employees who are on their husband’s sponsorship.

The challenge is monitoring any pay gap. As there is no provision for mandatory publication and audit of pay differentials, no-one will know if progress is being made, says David Jones, labour market economist, founder and CEO at The Talent Enterprise. He expects the new law to have only a minimal impact on the public sector due to basic pay being graduated across 22 different levels, which results in narrow pay scales.

“The majority of female workers in the UAE are unlikely to be significantly impacted, particularly in those parts of the labour market where women workers are renowned for being vulnerable and isolated from such progressive policies, such as the service industries, domestic labour and the informal labour market,” he says.

It would seem that any attempt to reduce the gender pay gap in the UAE’s private sector has to come from businesses themselves. Rowley says: “There is a need for HR practitioners to recognise, acknowledge and step up to the challenge. This involves them looking at their organisation’s culture and leadership as well as the key HR policies and practices of resourcing, development and promotion.

“Cutting against greater gender pay parity by addressing the lack of females in senior posts is one set of issues. Even organisational and structural issues are ground in, and underpinned by, deeper residing cultural ones. For example, even with greater emphasis given to work-family balance, tension remains between offering family friendly policies, including part-time working, as it is then too often penalised with stunted pay and career progression.

“To address this, firms need to normalise views of all non-full-time forms of work for all and not just females, reduce perceptions about those forms of work traditionally done by females being seen as less valued, and recognise and value rather than penalise less typical, non-linear career paths and patterns.

“Some of these actions require HR interventions and reinforcements in areas such as job descriptions, job responsibility, reward and promotion systems and a key cultural change,” he adds.

But there is hope for professional women in the private sector. Hopscotch co-founder and managing director Helen McGuire says: “We have data to show that just over 50 per cent of UAE companies now offer some flexibility to employees, which helps to balance out the male/female quotient.

“However, what is of equal importance is representation of women at senior levels – that is where the pay and gender gap is felt most keenly and can affect the numbers dramatically. It is a well-known fact that women are much less likely to ask for and get pay rises than their male counterparts and that the gender pay gap is in evidence in all regions of the world.”

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