Legilsation is required to ensure that the highest paid individual in any business does not exceed the pay of the lowest earner by a given multiple.
That multiple is found by subtracting the year from the number 2071. So in the current year, the maximumallowable multiple would be 50 times (2071 – 2021)
This multiple would reduce year by year in a steady and transparent manner, eliminating the egregious pay differentials over time. The legislation would apply to all employers – whether companies, educational institutions, charities or whatever.
As ever, detail is crucial. Three points come to mind.
(a) Pay wil include all aspects ofremuneration including bonus, share options, pension contributions et cetera. DIversion of payments abroad, or other avoidance tactics, will be outlawed.
(b) The lowest paid individual will either be a direct employee or an out-sourced employee suchas a cleaner or security person who mi ght otherwise have been on the payroll.
(c) All company returns will equire an annual satement to confirm compliance with the legislation, showing that the multiple is within the permitted maximum and how this has been calculated.
The government should review the legilation every 5 years to see whayt changes might be appropriate