On 12 February 2016, the Government issued a further consultation paper to address the issue of the gender pay gap, by proposing regulations that will require companies with 250 employees or more, to publish a range of figures and statistics to monitor and assess the gender pay gap within their businesses.
Here is a summary of what the draft regulations could mean for your business:
Who do the gender pay gap reporting regulations effect?
The regulations will apply to employers in the private and voluntary sector within England, Wales and Scotland with 250 employees or more. The Government plan to extend the scope of the regulations to the public sector in due course.
What will I have to do?
Employers will be required to publish 5 different statistics on the rates of pay within their business.
- The percentage difference between the mean pay of all male employees and all female employees.
- The percentage difference between the median pay of all male employees and all female employees.
- The percentage difference between the bonuses paid to male employees and female employees.
- The proportion of male employees and female employees who receive bonuses.
- Division of pay range into quartiles, reporting the number of male employees and female employees in each quartile.
Pay includes basic salary, paid leave, maternity pay, sick pay, shift premiums, allowances and bonus pay. It does not include overtime pay, expenses or benefits in kind. Employers will need to work out each employee’s hourly rate in order to create comparable statistics.
Where do I have to publish the figures?
The figures will need to be published on the employer’s searchable website and also on a Government sponsored website. Figures will need to be kept for 3 years to enable comparisons to be made.
When do I have to do this?
The Government hope to implement the regulations by 1 October 2016, but employers will not be required to publish their statistics until 30 April 2018. Employers will need to start collecting relevant data from April 2017.
Why do I have to do this?
The Office of National Statistics published findings that the gap between men and women’s pay for full-time workers was 9.4% in April 2015. This equates to an average of £100 per week. It is hoped that increased transparency will encourage employers to consider and address any gender pay gap within their own businesses. The statistics will assist employers to compare their results with other businesses within their sector.
Do I need to do anything now?
We recommend that you start compiling your data now to ensure that you are able to identify and address any gender pay gaps within your firm. For many companies, the required information will not be readily available and will need to be prepared well in advance of the reporting deadline.
Whilst there will be no formal penalties for employers who choose not to report, the Government are considering publishing the names of those who do not comply. It is also advised that employers provide explanatory notes to address any issues that are identified. There may be valid reasons why some statistics show more of a gap than others.
Failure to provide adequate explanations and prepare staff members for the findings could result in increased litigation, low morale, and poor retention rates.
The consultation on the draft regulations is open until 11 March 2016 and may be subject to further amendments. The results will be published in summer 2016 with further guidance notes on compliance.
For further information on gender pay reporting or any aspect of HR and employment law contact us on 0114 3032300 or email email@example.com.