The Government has today issued a second consultation and draft Regulations which, when implemented, will force employers to publish gender pay gap statistics about their British workforce.
1. What’s the timetable? Key dates for your diary
Employers will not have to publish their first gender pay gap report for up to 18 months from the expected date of the Regulations coming into force.
1st October 2016 – Regulations expected to come into force.
30th April 2017 – first pay data snapshot date.
30th April 2018 – the longstop date to publish first gender pay gap statistics.
Annually thereafter – employers must then publish their gender pay gap statistics every 12 months.
This timetable is intended to help employers get ready for the new regime and introduce any new systems or processes they need to capture the relevant data and analyse their gender pay gaps. Even with this lead-in period, however, employers may wish to start looking now at their arrangements to ensure they will be able to comply.
2. You must publish three different types of gender pay gap statistics about your British employees
Employers will have to publish:
- the mean and median overall gender pay gap figures for your organisation;
- the bonus pay gender pay gap for bonus payments over the preceding 12 months; and
- the number of men and women working across salary quartiles.
Many employers were concerned that they would have to provide very granular information such as breakdowns by full and part-time employees or by grade/job. It is now clear that this won’t be required.
To help explain any pay gaps they may have, employers will also be able to include additional narrative that provides context and sets out any actions the employer intends taking.
International employers will be pleased to know that the legislation is intended to capture just the British workforce – the draft Regulations will apply to employees who ordinarily work in Great Britain and whose contracts of employment is governed by UK legislation.
3. ‘Pay’ must include basic salary and bonuses, but not overtime
Employers will have to use the Office for National Statistics’ methodology for calculating ‘pay’ at the relevant snapshot date. This includes basic salary, shift premia, bonuses and other elements such as allowances. However, because of the distorting effect it can have on the statistics, employers can ignore overtime pay.
4. Sectors with bonus pay cultures must do more reporting
The Government believes examining basic pay rates alone will not give employers a full understanding of the underlying gender pay gap, especially in those sectors such as financial services where bonuses form a significant part of overall remuneration. Therefore, employers must separately analyse gender pay gaps from bonus payments made in the preceding 12 months.
5. Risks of ‘naming and shaming’: you must publish on your UK website and to the Government
Employers must publish their gender pay gap statistics on their UK website, and keep it available for at least 3 years. Employers will also have to upload the information to the Government. Press reports today suggest that the Government may use these to publish league tables, raising concerns that this might result in naming and shaming of those with large gender pay gaps.
Would you like your views on the draft Regulations to be heard?
This new consultation is an opportunity for employers to refine the mandatory gender pay reporting Regulations.