Given that today is International Women’s Day, it is worth a timely reminder about the new Gender Pay Gap reporting requirements that will soon come into force for larger entities.
Despite the Equal Pay Act coming into force in 1970, in Britain women still earn less than men. The Fawcett Society calculate that the current overall gap for full time workers is 13.9%. But how does this national statistic compare to the actual data on a company by company basis?
In December 2016 the UK government published legislation (The Equality Act 2010 (Gender Pay Gap Information) Regulations 2017) which is expected to come into force on 6 April 2017. Once the regulations are in force, private and voluntary sector employers with more than 250 staff will be required by law to calculate six different types of gender pay gap information and which must be published, by April 2018 and annually thereafter, on a company website that is accessible to employees and the public. The report must also be uploaded to a government website, which is currently under development.
The information that employers will be required to publish are:
- the difference in average pay (both mean and median) between male and female employees;
- the difference in average bonus pay (both mean and median) between male and female employees;
- the proportions of male and female employees who were paid bonus pay; and
- the proportions of male and female employees in each quartile of their pay distribution.
The report must include a written statement (signed by a director, partner or other senior individual, depending on the type of organisation) confirming that the information is accurate. Whilst there is no requirement to publish any accompanying commentary, many entities will wish to explain what the figures mean. Employers should consider the potential damage to their reputation, especially among current or potential future employees, of failing to put the data in context or to provide an explanation.
So what does this mean for relevant employers?
- Employers may have to collect gender pay gap data, from as early as 6 April 2016 in the case of bonus reporting, so there will be a need to ensure that the HR and finance systems allow this data to be collected.
- Information must be collected on employees as defined under s.83 of the Equality Act 2010, which includes apprentices and workers who have a contract personally to do work, therefore this could include some self-employed workers who are not on the employer's payroll.
- Consider what remuneration is included within “bonus pay” as this could include items such as share options and commissions.
- Consider if additional data would be useful for internal analysis of gender pay gaps, particularly if your organisation wishes to include meaningful narrative alongside the data.
The new legislation should be seen as a good opportunity to allow organisations to demonstrate how they are taking steps towards closing the gender pay gap.
For more information please contact Ella Waddingham at firstname.lastname@example.org