Gender pay gap reporting – an update
Following last year’s consultation, ‘Closing the Gender Pay Gap’, the Government has published draft regulations setting out the framework for the new gender pay reporting requirements.
The regulations are intended to come into force in October 2016 with the first reports to be published in April 2018, based on pay rates in April 2017. The public consultation on the draft regulations is now open and closes on 11 March 2016.
Who do the regulations apply to?
Employers in the private and voluntary sector with 250 or more employees will be required to publish pay reports regarding their ‘relevant employees’. A relevant employee means someone who ordinarily works in Great Britain and whose contract of employment is governed by UK legislation.
Importantly, the reference to a contract of employment places workers and the self-employed outside of the scope of the regulations. This will mean that recruitment companies who engage agency workers other than on a contract of employment will not need to include the agency workers in a report, for example.
What needs to be reported?
Employers will need to publish:
- The difference in the mean gross hourly rate of pay between male and female employees;
- The difference in the median gross hourly rate of pay between male and female employees;
- The difference in mean bonus pay between male and female employees during the previous 12 months;
- The proportion of male and female employees who received a bonus during the previous 12 months; and
- The number of men and women in each quartile of the employer’s pay distribution.
There is no obligation to provide a narrative alongside the information or to break down the pay rates into different roles or part-time and full-time employees, however, employers are free to add additional information to their published reports. If there is a clear gender pay gap, employers would be wise to prepare a response to this when releasing the report. For example, confirming that fewer women apply for senior positions within the organisation.
How is the report published?
Employers must publish the full pay report on a searchable website every year and are required to retain this information online for three years. The report must also be uploaded to a government website.
A public database will be created as employers publish the information, with the intention to ‘name and shame’ those employers who do not comply. The Government also intend to produce a ‘league table’ to highlight the best and worst gender pay gaps and have indicated that this may be broken down by sector. The Government will review whether civil penalties for non-compliance should be introduced in due course.
What should employers do now?
Although this may seem very far away, affected employers should consider carrying out an informal pay audit prior to April 2017 collecting the required information outlined above. This will reveal whether discrepancies and gender pay gaps exist, which can be rectified prior to the public reporting. It is important that employers are ready to publish the reports as any non-compliance or delay is likely to be damaging for both public and employee relations.
If you have any concerns about the upcoming gender pay gap reporting, do please get in touch with the Employment Team on 023 9236 6049, or why not join us on 30 March for our training workshop on Delivering Diversity.