Gender Pay Gap Reporting
On 6 December 2016 the government published the revised draft regulations on gender pay gap reporting which are due to come into force on 6 April 2017, subject to being approved by Parliament.
What is meant by the gender pay gap?
The gender pay gap is the percentage difference in the average annual pay, excluding overtime, of men and women, monitored nationally by the Office for National Statistics.
The Equality Act 2010 contains provisions to allow the government to make regulations that require gender pay gap reporting by employers in the private and voluntary sector. Initially, instead of making these regulations, the 2010–2015 government introduced a voluntary gender pay gap reporting initiative. This initiative however, failed achieve the desired transparency hoped for and in 2015 the government committed to bringing in the gender pay gap regulations in a bid to “end the gender pay gap in a generation” (David Cameron 2015).
Consultations on the draft regulations have been taking place since July 2015 to introduce a mandatory gender pay gap reporting requirement and the final draft regulations were published on 6 December 2016 subject to Parliament’s approval. Once approved they will come into force on 6 April 2017.
Who do the reporting requirements apply to?
Large private and voluntary sector employers with 250 or more relevant employees on 5 April each year (snapshot date). The government intends to extend this to some public sector employees and this is the subject of separate consultation.
What are the reporting requirements?
All affected employers must assess their gender pay gap on 5 April each year and report within 12 months (no later than 4 April each year):
- Gender pay gap figures for employees (mean and median values);
- Number of men and woman within the lower, lower middle, upper middle and upper pay bands based on the employer’s pay range;
- Gender bonus pay gap over a 12 month period (mean and median values);
- Proportion of males and females who received a bonus over the last 12 month period;
- Information (non-mandatory), explaining any disparities and how employers are going to address these;
- Produce and publish an annual report on their website (available for 3 years) and onto the government website.
The government will produce guidance to help organisations comply with the regulations which will include information on how to calculate the pay gap, bonuses and how to identify who are the ‘relevant employees’.
While employers affected by the regulations are not required to produce reports until April 2018, the requirements to start capturing this information starts in April 2017 when the regulations come into force. It is therefore important that employers start taking preparatory steps to analyse this information and to consider how the gender pay gap can be improved going forward.