Gender Pay Gap Reporting: What You Need to Know

The gender pay gap is the difference between male and female earnings. Statistics show on average today women are earning what men earned in 2006. The Government has published the draft The Equality Act (Gender Pay Gap Information) Regulations 2016. The draft Regulations set out the framework for the new gender pay reporting requirements; and are intended to come into force in October 2016, with the first reports to be published in April 2018.

The gender pay gap reporting rules will apply to companies with 250 or more employees; but doesn’t apply to Public Bodies. By the 30th of April each year starting April 2017, companies must count their employees and if they have 250 or more, then they have one year to issue reports.

Regarding the reporting, what does pay include? It includes the basic salary, paid leave, shift premiums, bonus, sick pay and maternity leave. It does not include expenses, overtime, the value of salary or the value of benefits in kind.

There are 5 key things that will be mandatory for employers to publish; this includes the difference in mean pay which is the mean gross hourly rate of pay of male and female employees. The percentage difference between the mean average must be published, not the actual pay. The difference in median pay must also be published; this is the hourly rate of the person who appears in the middle of the list. The difference in average bonuses paid to men and women must be reported separately from the hourly pay rate; and payments received, earned and the cash equivalent of any shares should be taken into account. The proportion of men and women who receive bonuses must be published; this is the amount of people, not money. Finally, the gender pay split breakdown between quartile pay bands. The number of men and women in each pay band should be reported; this allows people to see the extent of people/gender in low paid jobs.

Employers should publish the information on their website and the website should be accessible to everyone, not just employees. It should be kept there for at least 3 years as this enables comparisons for previous year figures. The information should be signed by a director and employers are well advised to make a communications plan. The information must be uploaded to the government who will publish league tables of the best and worst pay gaps among companies, and these league tables are likely to be broken down into sectors.

There are currently no penalties for non-compliance of these regulations. It is likely however, if companies choose not to publish information, campaigners are likely to target the company, gaining them bad press. It is the Government’s initial intent for employers who do not comply to be ‘named and shamed’, and will review whether civil or criminal penalties for non-compliance should be introduced in due course.

To summarise, employers should be working out the figures now, and will have to publish the 5 pieces of mandatory information by April 2018 on a website accessible to the general public and upload this information to the Government. There is no obligation for employers to publish what they’re doing about the gender pay gap, and the draft Regulations are open for consultation until 11 March 2016.

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