The final version of the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 has been published. As expected they will take effect from 5 April 2017. The Government has also confirmed its intention to extend mandatory gender pay gap reporting to the public sector but this is not covered by these regulations.
The key obligations introduced by the regulations are as follows:
- they apply to all private sector employers with 250 or more employees;
- employers must publish the mean and median hourly pay gap between men and women. “Pay” for this purpose includes any bonuses paid in the pay period;
- employers must report the annual bonus gap between men and women. “Bonus” is defined widely and includes commission;
- employers must publish the numbers of men and women in each quartile pay band;
- the data must be published on the employer’s website by April 2018, and stay there for three years.
The final regulations contain a number of amendments from the original draft. The key points to note are as follows:
- the final regulations use a broad definition of employee. Many self-employed workers who are engaged as consultants, independent contractors and so on will therefore be caught, although there are exceptions. This means many more employers are likely to come within the regulations as these workers will count towards the 250-employee threshold;
- partners, including LLP members, are expressly excluded so there is no need to provide pay or bonus data for partners;
- the regulations have clarified what a “quartile” is and include steps to follow to put employees into each band. The workforce should be split into four equal-sized groups from the lowest to the highest paid, organised according to the hourly pay rate;
- if a number of employees receive the same hourly rate of pay, the employer should so far as possible ensure the relative proportion of men and women is the same in each pay band;
- there is no specific enforcement mechanism, but the data must also be submitted to the Secretary of State and league tables for specific industries may be created. In time this may lead to naming and shaming.
If you have not already done so, now the regulations are finalised this is the time to produce a gender pay report to highlight, and if possible correct, areas of difficulty before the report has to be presented.