Mind the Gap: New Gender Pay Gap Reporting
The Gender Pay Gap Information Regulations, published by the government on December 7th 2016, requires the statutory annual reporting of information surrounding salaries, bonuses and pay differentials between male and female employees.
Coming into force from 6th April 2017, the regulations will apply to all private and voluntary sector employers with 250 employees or more, and publishing relevant data on websites will become statutory requirement from 4th April 2018. It is hoped that the policy will eradicate the possibility of employers being evasive around issues of gender equality within their organisations, whilst supporting those employers who are already actively taking steps to reduce gender pay gaps.
Whilst there are no legal obligations for smaller businesses to report data, employers of all sizes should consider the advantages and will be actively encouraged to do so.
When the policy comes into force on 6th April 2017, qualifying employers must publish:
- The mean and median gender pay gap – Difference between the mean and median hourly rate paid to relevant male and female employees within their organisation
- The mean and median gender bonus gap – Difference between the mean and median bonus pay paid to relevant male and female employees within their organisation
- The proportions of relevant male and female employees who received bonus pay
- The proportions of relevant male and female employees in the lower, lower middle, upper middle and upper quartile pay bands
(all differences to be expressed as a percentage)
An employee is defined as ‘relevant’ under a broad umbrella, but has been clarified to mirror the Equality Act 2010. Employees with zero hour contracts, apprentices and some of those who are self-employed such as consultants and personal contractors will be required to be part of the data collection process. Employers are not required to include data specifically relating to those on reduced rates due to maternity or sick leave. Agency workers are included, but should be counted by the agency providing them. If an employer cannot realistically obtain relevant data for an employee, such as casual staff, the regulation has offered a further exemption of requirements.
Pay is classified into two categories; ordinary pay and bonus pay.
For employers, it is a legal requirement for data collected to be published on their company website, accessible to both employees and the public, where it must remain for at least three years. It must also be uploaded to a government website, which has yet to be unveiled.
Employers will have a choice when uploading their findings to the government website. Whilst there is no obligation to provide accompanying commentary, it may be beneficial to some employers. The scheme is in place to encourage employers to tackle this long-standing issue head on, and it is likely many will wish to provide information on how they intend to do so.
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