Employers should be aware of new gender pay gap reporting requirements that are coming into effect in the UK in March 2016. This Alert provides guidance for organisations to consider in regards to complying with these reporting requirements.
Gender Pay Gap
The UK Government amended the Small Business, Enterprise and Employment Act 2015 with a provision requiring that the regulations under section 78 of the Equality Act 2010 related to publishing gender pay gap information will come into effect on 26 March 2016 for private-sector employers with over 250 employees.
In terms of average statistics, the UK has a gender pay gap of approximately 20 percent. Employees may not be aware that their organisations even have such a pay gap. Meanwhile, 70 percent of organisations do not carry out an audit on across-the-board salaries with a view to identify gender disadvantages. On balance, it is likely that the results of an audit will show that an organisation has a gender pay gap.
Organisations eventually will be required to display pay gap information publicly, including on their website. The degree of narrative that accompanies this information is yet to be decided.
Aside from the likely significant impacts on an organisation's brand, public relations, ability to retain and recruit, and risk of potentially expensive litigation by employees, a £5,000 penalty may be applied where there is a failure to publish pay gap information.
What This Means for Employers
Organisations should consider seeking legal counsel for assistance with auditing their gender pay gap data and resolving the pay gap difference, or presenting it in such a way that could help protect their business.