Gender pay gap reporting. What do you need to know?

On 6th April 2017, The Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 for private and voluntary-sector employers come into force. Applying to all private and voluntary-sector employers with 250 or more employees, the new legislation makes it mandatory for employers to release information relating to employee pay and bonus pay, as well as information on the number of men and woman in each quartile of the organisation’s pay distribution.

Here are some of the finer points of the legislation employers with 250 or more staff will need to consider:

  • Although the Regulations come into play from April 2017, companies will actually have until April 2018 to publish their results. In addition to submitting the information to be publicly displayed on a central government website, the information must also be published on the company’s own website
  • Employers must publish calculation for each year their staff head count is 250 or over. The first published reports will be for the pay period between April 2016 and April 2017.
  • There are six calculations employers must publish. These are:
    • average gender pay gap as a mean average
    • average gender pay gap as a median average
    • average bonus gender pay gap as a mean average
    • average bonus gender pay gap as a median average
    • proportion of males receiving a bonus payment and proportion of females receiving a bonus payment
    • the proportion of males and females when divided into four groups ordered from lowest to highest pay.
  • For the purposes of gender pay reporting, the definition of ‘employees’ has a wide scope and includes employees, workers, as well as some self-employed people. Agency workers are included, but will be counted by the agency providing them.

It will be interesting to see what impact the new legislation will have. Some results have started to come to the fore already under voluntary reporting including Virgin Money, whose 2016 annual report showed a mean gender pay gap of 36%.

Although only applying to larger organisations at present, commentators are predicting the legislation may be rolled out on a wider scale in the future in order to fully tackle the issues at hand.

Companies of smaller number employees may wish to consider their own figures on gender pay. Although not (yet) required to publish them, it’s important to note that it is illegal for any company of any size to have a discriminatory pay policy and that women (and men) have a right to equal pay for equal work. Under The Equality Act 2010, any company found to discriminate on the basis of gender (or any other ‘protected characteristic’) could face an unlimited fine.

For further help or advice in relation to gender pay reporting, please contact either: Pam McColl or Amanda Isherwood or call us on 0161 312 1864. We are situated in Bramhall, Stockport, Cheshire and are happy to give employment advice to Greater Manchester employees and employers.