12 February 2016 was the day the government published its draft regulations on gender pay gap reporting. Consultation on the draft regulations will continue until 11 March. All going to plan, these will come into force on 1 October this year.
What does this mean for employers?
The regulations will only apply to employers with 250 or more employees and will apply to both public and private sector employers.
The first full reports will be due by April 2018 based on data for the April 2017 pay period. The relevant pay period for each employee will be the one (usually the week or month) in which 30 April falls.
What must be reported?
The information required is the difference in mean and median pay between male and female employees. Where bonuses are paid, the difference in mean bonus payments between male and female employees as well as the proportions of male and female employees who actually receive bonus payments must also be published. Pay for these purposes includes basic pay, holiday pay, statutory pay, bonuses and shift premia but does not include overtime pay and is calculated on the basis of hourly rates of pay.
What must employers do with the information?
Gender pay gap data will need to be published on a website which is accessible to both staff and the public and to be retained for 3 years. It must also be reported to the government which intends to publish details of reported pay gaps by sector.
What happens if an employer doesn’t comply?
At this time, no civil penalty is proposed for non-compliance although this will be kept under review. The government appears to be relying on the associated negative publicity and its impact on reputation and customer, employee and investor relations to encourage compliance. Additionally, employers who fail to comply may be “named and shamed”.
What steps should employers caught by the regulations be taking?
Employers should make sure that they are in a position to capture the relevant information for the April period and plan how they will then analyse and publish it. In the event that a gender pay gap is revealed by the information, consideration will need to be given to what can be done to remedy that and limit any impact on the employer’s reputation. Employers are able to publish additional information along with their Gender Pay Report to provide explanation or context in respect of any gap or to outline steps taken to remove it. There is speculation that the increased availability of gender pay information in the private sector will lead to an increase in equal pay claims.
If you have any questions on any of the issues raised in the above article, please contact Frances Smith