Gender pay gap reporting- is your company prepared?

The final draft of the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 (“the Regulations”) has now been published by the government and is due to come into force on 6 April 2017. We will of course keep you updated on any changes to the draft legislation, but in the meantime we thought we would take the opportunity to remind you of the implications of the Regulations for employers.

The purpose of the Regulations is to help reduce the ‘gender pay gap’ – or the difference in average earnings between men and women. With that purpose in mind, the Regulations impose certain ‘gender pay gap’ reporting obligations on private or voluntary sector employers with 250 or more employees. The government has also recently published draft gender pay gap reporting legislation for public sector employers with more than 250 employees. We will not discuss the public sector legislation in this article, but it largely reflects that of the private sector reporting obligations. One of the major differences for public sector employers is that the data collection date is 31 March each year.

However the key date that private sector employers will need to bear in mind is now the 5 April (previously the 30 April). This is the date that most data relating to the gender pay gap within their organisation needs to be taken. Employers will have a year from that date to compile a report and publish the necessary information. If the Regulations do come into force on 6 April 2017, employers will therefore have until 4 April 2018 to publish their report.

Data relating to bonuses is treated slightly differently from other data in that it needs to be taken over the period of a year instead of just a day (though the relevant annual period also starts and ends on 5 April).

What information needs to be published?

The following information will be expected to be included in an employer’s report:

  • The difference between the mean pay of male and female employees.

  • The difference between the median pay of male and female employees.

  • The difference between the mean bonus pay paid to male and female employees between 5 April the previous year and 5 April in the current year.

  • The difference between the median bonus pay paid to male and female employees between 5 April the previous year and 5 April in the current year.

  • The proportions of male and female employees who were paid bonus pay.

  • The proportions of male and female full-pay relevant employees in various ‘quartile bands.’

The employer will need to publish the information by uploading it onto a specific government website and onto the ’employer’s website.’ Though there are no enforcement provisions, the explanatory note to the Regulations indicates that failure to comply with the Regulations constitutes an ‘unlawful act’, empowering the Equality and Human Rights Commission to take enforcement action.

What should employers do now?

Employers that think they might be caught by the Regulations should start thinking about their obligations and seek legal advice now. In particular we would recommend that all relevant employers:

  • Work out the figures now, so they can see the likely results.

  • Work out how any issues can be resolved while there is still time; companies have until 5 April 2017 until the data has to be taken (except note bonuses between 5 April 2016 and 5 April 2017) and have got until 5 April 2018 to decide how they will illustrate the data/deciding what wording will be presented with the statistics. 

  • Consider the software available to them and whether it can be used to calculate this information.

In addition to the above, while smaller businesses are not immediately affected, it’s inevitable that the legislation will, in due course, be rolled out to them too. But just as importantly, in this increasingly socially aware society it is in every business’s interests to have a clear, concise and fair approach to ensure they have a balanced approach to equality.  Employees of the future will be picky about who they work for and factors such as your approach to equality, fair pay and opportunities will encourage the ‘best’ candidates to seek out the businesses that have the most transparent and fair approach in these areas.

If you have any questions regarding any of the information in this article, or need assistance complying with your gender pay gap reporting obligations please do not hesitate to contact a member of our team.