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Gender Pay Gaps: The Latest Reporting Requirements

May 2016

On average, male employees are paid more than female employees. In 2015, men working full-time were paid approximately 9.4% more than women working full-time. As a result, the government is working to introduce measures with the aim of reducing this gap.

The new gender pay gap reporting regime

The government has published new regulations which will introduce mandatory gender pay gap reporting. The requirement only concerns employers with 250 employees or more and aims to increase employee confidence in the remuneration process and also help employers to identify areas in which they need to increase female participation. The government believes that having a consistent measure of the gender pay gap that can be compared across employers and sectors will encourage employers to examine their gender pay data in comparison to the national average and their competitors.

What is required of employers?

From April 2017, employers with over 250 employees will be required to:

  • Publish overall gender pay gap figures using both their mean and median figures. The median perhaps gives a better representation of the gap because it is not distorted by a small number of high earners in a particular organisation;
  • Report on the number of men and women in their four salary quartiles based on the employer’s overall pay range;
  • Publish separate information on the gender pay gap relating to bonuses.

In addition, employers have the option to include an explanation together with their results. This narrative will be beneficial to employers who currently have a large gender pay gap but who intend to take action in the future to improve equality of pay in their workplace.

What is meant by “pay”?

Employers should take into account the following when reporting their gender pay gaps: basic pay, paid leave, maternity pay, sick pay, area allowances, shift premium pay, bonus pay, car allowances and other allowances received through the payroll. Overtime, expenses, redundancy pay and tax credits should not be included. Pay should be calculated using gross figures.

When will employers need to publish their statistics?

Employers will need to report their gender pay gap annually in order to promote transparency and maintain momentum in the need for employers to take action. On 30 April of each year (beginning in 2017), employers with 250 employees or more should take a snapshot of their data relating to pay. Employers will then need to analyse and publish their gender pay gap statistics at any time within 12 months from 30 April. This provides employers with a fair amount of flexibility.

The government estimates that costs incurred by employers in complying with the new requirement will be minimal and will average £468 per year per employer.

How should the data be published?

Employers should publish their gender pay gap data on their website and also retain the information themselves for 3 years. The information needs to be disclosed to the government via a government-sponsored website together with a written statement confirming that the information is accurate. The written statement should be signed by a director, a designated member, a partner or the most senior employee of the employer, depending on the type of organisation in question.

How will the government monitor the results?

In order to ensure compliance with the new regulations, the government will:

  • Run periodic checks to assess for non-compliance
  • Produce tables by sector of employers’ reported gender pay gaps
  • Highlight and identify employers who publish particularly detailed results
  • Name and shame employers who have not complied.

This means that there is no formal enforcement mechanism in the form of sanctions for employers who fail to comply with the new regulations. The information published does not need to be audited or verified. The only real consequence of non-compliance will be the impact of scrutiny by the public and prospective employees which could lead to reputational damage.

   Mark Symons

Mark is an experienced commercial employment specialist who is Head of the Employment Department which operates out of London Reading and Southampton.

   Angela Shields

Employment disputes, including unfair dismissal, whistle blowing, discrimination and obtaining or defending applications for injunctions in relation to restrictive covenants, confidential information or intellectual property.

 

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