Summary: A new Government consultation highlights likely changes to be made in the forthcoming final mandatory gender pay gap reporting regulations for private and voluntary sector employers.

The Government is consulting on introducing mandatory gender pay gap reporting in the public sector. It indicates in its latest consultation that the public sector regime will largely mirror, and be introduced at the same time as, the regime that is being developed for the private and voluntary sectors.

We are still waiting for publication of the final regulations for private and voluntary sector employers. However, given the Government’s intention that the private and public sector reporting regimes will take the same approach, the Government’s new consultation highlights changes we can expect to see in the final version of regulations for private and voluntary sector employers. In particular:

  • The reporting obligation is expected to apply to a far wider category of “employees” than provided for in the draft regulations. Affected staff could include those who contract personally to do work, some self-employed contractors, apprentices, zero hour workers and potentially also LLP members.
  • International employees who are not based in Great Britain are likely to be in scope if they have “a strong connection with” Great Britain. This again potentially captures a wider category of people than previously anticipated in the draft regulations.
  • When reporting on the proportions of men and women in each pay quartile, the Government suggests that employers will have to divide the workforce into four equal sized groups, separated according to hourly pay rate from the lowest paid to the highest paid, rather than dividing the overall pay distribution into four equal proportions.
  • Employers are likely to be required to publish the median, as well as the mean gender bonus gap.
  • The “snapshot” date for calculating the gender pay gap is likely to be 5th April each year from April 2017 onwards (not 30th April, as previously indicated).

What employers can do now to prepare for mandatory gender pay gap reporting

There is much employers can do now to start preparing for the new reporting requirements, including:

  • putting together a gender pay gap reporting implementation team (which will need to have input from various stakeholders such as HR, Payroll and your legal team);
  • obtaining buy-in from those at the top of your organisation – the regulations require sign off from a senior executive; and
  • considering doing a ‘dummy run’ pay gap analysis, to give you a head start on identifying significant pay gaps, to aid your thinking on how to manage them.