Before the General Election the previous government made a last minute change to the Small Business Enterprise and Employment Act, adding a section obliging the next government to introduce (for employers with 250+ staff) mandatory reporting of differences in pay between men and women, within 12 months of the Act receiving Royal Assent (in other words, by the end of March 2016). Consultation has now started on how the reporting requirements might work in practice. It runs until 6 September and the paper can be accessed here.
There does seem to be some uncertainty on timing. The section added to the Small Business Enterprise and Employment Act has not yet been given a start date and the consultation paper does not appear to assume that it is set in stone. The first consultation question is whether respondents agree that publication of gender gap information will encourage employers to take action to close the pay gap. Another question asks whether the 250 employee threshold is appropriate.
In any event, a lead-in period is clearly envisaged. Regulations will be made in the first half of next year but will be delayed for "an appropriate period" to give businesses an opportunity to prepare for implementation.
The key issue for employers is what level of information will have to be provided. Options being considered include:
- An overall figure for the organisation – the difference between the earnings of men and women as a percentage of male earnings
- Figures split between full-time and part-time employees
- Figures broken down by grade or job type.
There is also discussion of whether any additional narrative reporting to put the information in context should be required by the regulations, entirely voluntary, or voluntary with content laid down by regulations or non-statutory guidance.
Which of these various reporting options employers might prefer is a difficult one – on the one hand, many employers will not currently have structures in place to assess anything other than the overall figure; on the other, raw figures without explanation can be misleading and potentially more damaging to reputation.
Other issues raised by the paper include:
- Whether the regulations should specify where the gender pay information is published (on the company website, for example)
- How often gender pay gap information should be published – annually, two yearly, three yearly or some other period
- When the obligation should come into force (by reference to a specific date, or by reference to a company's year-end) and whether it should apply from a later date for employers with between 250 and 500 staff
- How to ensure compliance.