Gender Pay Reporting – What
Employers need to know
The gender pay gap has become the
hot topic across all work industries, with the Prime Minister pledging to “end
the gap within a generation”. The increased pressure and publicity has resulted
in the Government publishing the draft, Equality Act (Gender Pay Gap
Information) Regulations 2016 which requires the disclosure of gender pay data.
From the 30 April 2017, any employer
with 250 or more “relevant employees” will have to publish yearly gender pay
reports by 30 April each year. This means that the first official report must
be published by 30 April 2018. A relevant employee is any employee that
ordinarily works in Great Britain and has their employment contract governed by
English law. Workers, genuine
self-employed contractors and partners will not be considered as relevant
employees. Despite this not impacting employers until 2017, employers should
start to consider what they will need to do to be legally compliant.
What needs to be published?
Employers will be required to
publish 5 key figures:
- Difference in mean
pay – i.e. what does the average employee receive;
- Difference in
median pay - i.e. what does the middle
person receive;
- Difference in
bonuses;
- Proportion of men
and women who receive bonuses; and
- The number of men
and women working in each pay quartile.
Pay includes basic salary, paid
leave, maternity and sick leave, shift premiums and bonuses. Pay does not
include overtime, expenses, benefits in kind and salary sacrifices. These
figures must be published on an employer’s website (accessible to the general public)
and remain available for at least 3 years to allow for year-on-year
comparisons.
What should you be doing now?
- Start
calculating figures and identify whether a pay gap exists;
- Make a
comparison against other industry competitors to establish whether you are
ahead or behind; and
- Draw up a communications
plan to explain the figures – outline the actions your business is taking to
attract, recruit, develop and retain women.
What if you do not comply?
There are no legal penalties but employers
can expect a lot of negative PR from Unions, NGO’s and private campaigners that
will be eager to “name and shame”. This can result in a reduced customer base,
reduction in ethical investment or worst case a boycott from some men and
women.
This is an important development
in employment law but as these regulations are still in draft form we will
watch with interest as it progresses.
