The first draft of regulations requiring any employer in the UK with at least 250 employees to publish information about the difference in pay between men and women was published in February 2016. Although subject to further consultation, these regulations provide a likely indication of the new requirements that will arise which are expected to come into force in October. Key provisions include a requirement for relevant employers to publish:
- the overall mean and median gender pay gaps across the workforce, using an hourly pay rate for each relevant employee;
- the difference between the mean bonus payments paid to men and women; and
- the number of men and women in each quartile of their pay distribution.
"Pay" is defined broadly and encompasses basic pay, paid leave, maternity pay, sick pay, and most allowances such as car allowances, shift premium pay and bonuses. Not included in "pay" is overtime, the value of salary sacrifice schemes and benefits in kind.
Employers are required to publish the gender pay information on a searchable UK website which can be accessed by both employees and the public. The information must also be signed off by a statutory director and retained online for a minimum of 3 years. Employers are also being encouraged to publish a narrative to accompany the information they give which further explains the data provided.
The draft regulations require employers to calculate pay gaps using data from a specific 12-month pay period ending 30 April in a relevant year. The first reports will need to be published in April 2018.
Gathering this information is likely to be time consuming. As such, we recommend that employers should start considering how they will meet their future obligations including whether their current systems enable them to gather all the information they need to comply with these new reporting requirements. Employers should also consider proactively identifying gender pay gaps that are likely to emerge through any disclosure and how to address these in advance of publication, including through any accompanying narrative.