The Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 have now been published. It is expected that these will come into force on 6 April 2017. In summary, they will require private sector employers with 250 or more employees to publish annual reports detailing the various aspects of pay (including bonuses) in their organisation. As the name suggests the objective of the new legislation is to make employers publish the details of the difference between hourly rates of pay paid to male and female employees including the difference between average bonus payments. Only private companies with over 250 employees will be affected for the time being but it is anticipated that public sector employers will be subject to similar legislation in the near future.
Who is included?
Employers will be required to report on all employees (including apprentices and individuals who are engaged as workers). Consequently, this could require employers to report on some workers who are not paid via their payroll. Employers will not be required to report on or include employees who are on a period of leave during which they will receive less than full pay. This is to ensure that periods of statutory absence (for example, maternity leave) do not adversely affect the quality of the data and present a distorted picture of pay. Partners and members of LLPs will be excluded from the reporting requirements.
How will these reports be published?
The report will need to be published on the employer’s website for at least three years from the date of publication and be in a manner which is accessible to both its own employees and the general public. The report will also need to be published on a website to be designated by the secretary of state.
Currently there are no legal penalties for non-compliance as the Government anticipates the risk of bad publicity and reputational damage being sufficient incentives for employers to comply with their obligations. However, if a large number of employers fail to comply it is likely that this position will change.
It is unclear at this stage as to whether or not this will lead to an increase in equal pay claims, however, these reports may reveal previously hidden equal pay issues in businesses. Further, these reports may be key pieces of evidence in any equal pay claims which are brought.