Gender Pay Gap Reporting

The Regulations setting out the requirements for large private and voluntary sector employers (those with 250 or more employees) to provide an annual report on the gender pay gap within their organisation are expected to come into force this April. These statutory requirements come on the back of a series of initiatives and consultations on how best to look to bridge the ongoing gap between the wages of men and women in the workplace. With the most recent Office for National Statistics figures showing that there remains a gap of 9.4% for full-time employees.

Employers affected by these changes will be required to publish figures for the mean and median hourly pay of their female employees as compared to their male employees. These figures will, in turn, be required to be broken down into quartiles to illustrate the extent of the gap at different salary levels in the organisation. Pay will include basic pay, any paid leave, allowances, shift premiums and bonus payments. It will not include any overtime pay, expenses, payments under salary sacrifice schemes and benefits in kind. Bonus payments will include payments received and earned in relation to profit sharing, productivity, performance and other bonus or incentive pay, piecework and commission.

In addition, such organisations will be required to provide information about men and women’s mean bonus payments over a 12 month period and the proportion of male and female employees who receive a bonus during that period; the same definition of bonus payments will be applied.

Organisations will be monitored and those not complying with the requirement to publish such information may end up being named and shamed.

Breaking this down, the reports published by relevant organisations will need to include:

  • The difference in mean pay between male and female employees;
  • The difference in median pay between male and female employees;
  • The difference in mean bonus pay between male and female employees;
  • The proportion of male and female employees who receive a bonus during that period;
  • The numbers of male and female employees employed by the organisation on the prescribed date in quartile pay bands.

Those within the organisation charged with working out the mean and median pay of employees are likely to need to dust off their old maths textbooks with particular care having to be taken to ensure that the raw data on the salaries and bonuses of employees is accurate and lends itself to analysis for these purposes. Organisations will need to publish their report on their website and submit a copy to the Government annually.