The Government has published its long-awaited final form draft regulations on gender pay gap reporting. Subject to Parliamentary approval, the new requirements are due to apply to private sector employers with 250 or more employees from 6 April 2017. A draft Explanatory Memorandum states that supporting non-statutory guidance will be published after Parliament has approved the regulations.
Key changes include:
- As expected (to mirror the consultation on the public sector duty), the date for the snapshot to be taken has shifted from 30 April to 5 April; the first set of data will need to cover 6 April 2016 to 5 April 2017 and be published by 4 April 2018.
- Employers must report the median gender bonus pay gap as well as the mean.
- The pay quartile wording has been clarified to specify that the workforce is to be divided into four equal sized groups.
- The previous definition of employee (by reference to individuals ordinarily working in GB and under a contract of employment governed by UK law) has been removed altogether, with the explanatory notes stating that the s83 Equality Act 2010 wider definition (including those with a contract personally to do work) will apply. Partners, including members of LLPs, are expressly excluded. There is also an exception from the reporting duty for workers with a contract personally to do work in respect of whom the employer does not have, and it is not reasonably practicable to obtain, the relevant data.
- To avoid the distortion caused by employees receiving lower than usual pay while on various types of leave, only 'full-pay relevant employees' are to be included in the data.
- There are new provisions specifying how to calculate the gross hourly rate of pay, covering employees with no normal working hours and the pro-rating of bonus. There is also helpful clarification as to when remuneration in the form of securities, securities options and interests is to be treated as paid.
Employers will need to take action now, in particular to ascertain whose data must be included (given the broader definition of employees, which could extend to some self-employed contractors or 'consultants'), to ensure they have the necessary tools in place to collect the necessary data (particularly for casual workers), and to begin to consider how that data may be presented in terms of an accompanying narrative.
For further details, see our briefing here.