Is Your Business Ready For Gender Pay Gap Reporting?
The Law Of… getting ready for gender pay reporting
It's been in our headlines for almost a year, but the regulations on gender pay reporting for large businesses are finally coming into effect on 6th April 2017.
What can employers expect from the regulations? And will this help the UK labour market take positive steps towards achieving pay equality for women and men?
David Hession, Solicitor in Employment Law, explains what employers need to know.
Equal Pay For Equal Work
47 years ago, the Equal Pay Act was launched.
With the goal of tackling gender inequality when it came to pay, the Act made it unlawful for women to be paid less than men if they were doing the same work.
One of the major goals of the Equality Act 2010 was to make sure that women and men have the right to equal pay for equal work.
The 2010 Act also contained one key provision that could help combat the pay gap: it gave the Government the power to impose mandatory gender pay reporting on large-scale businesses.
Up until now, employers could publish information about gender pay within their business on a voluntary basis. This has generally been met with a lukewarm response, as only a small number of organisations have volunteered this information.
But, from 6th April 2017 mandatory gender pay reporting regulations will come into effect for employers with 250 employees or more.
What Types Of Employers Have To Publish Gender Pay Data?
Businesses with 250 employees or more will now have to publish data on their gender pay, including:
- The difference in mean pay between men and women
- The difference in median pay between men and women
- The difference in mean bonus pay between men and women during the preceding 12 months
- The proportion of men and women who get bonus pay
- The total number of men and women who are situated in each of the 4 pay bands (or quartiles)
Who Will Gender Pay Gap Reporting Apply To?
Reporting will apply to employees and workers who are employed under a contract of employment. This also includes casual workers, contractors, and apprentices, but this doesn't apply to agency workers as they're seen as being employed by the agency and not the employer directly.
How Will Employers Calculate The Pay Gap?
Employees' pay will be measured based on their earnings on the snapshot date, which is:
- 5th April for businesses and charities
- 31st March for public sector organisations
Basic pay and shift premiums, allowances, and pay for leave will be included in the calculations.
Overtime, however, is excluded as well as employees who receive less than full pay (for example, employees who are on sick leave).
What Happens If An Employer Doesn't Comply With The Regulations?
If an employer fails to comply with the regulations, it might just find itself at risk of being publicly named and shamed by the Government.
This tactic is part of the Government's attempt to encourage businesses to become more proactive in taking action to eliminate the gender pay gap.
As this data will be publicly available, this might influence whether a prospective client, supplier, or even potential employee decide to work with a business – especially if they can see that their gender pay gap is substantial.
This, in itself, is enough of a reason for employers to swiftly deal with any existing issues.
At this point, it's also unlikely that the Government is planning on putting any civil fines in place for employers if they fail to comply with the regulations.
But, it might keep track of the levels of compliance over the next few years and depending on these results it might consider whether it's necessary to put any sanctions in place.
How Can Simpson Millar Help My Business With Gender Pay Reporting?
Being prepared for gender pay reporting is key for employers. The sooner you have the right processes and policies in place, the smoother the process will be.
Whether you're unsure about what the regulations mean for your business or you need help creating an action plan, our Employment Law
solicitors can offer you tailored, expert support.