New Gender Pay Gap Reporting ("GPG") guidance has been published by ACAS. For details about this new guidance which has answered some difficult questions and issues for organisations, read on...
ACAS GPG Guidance
As you will know, from 6 April 2017, new GPG reporting obligations came into force for all relevant private and voluntary organisations. The requirements are set out in the snappily titled Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 (the “Regulations”). The first “snapshot” date for these calculations was 5 April 2017. We discussed the requirements for calculating the GPG in our article of 12 January 2017.
However, there has been confusion over some of the details regarding which workers or pay elements to include when calculating the Gender Pay Gap figures. To help employers, ACAS has just published guidance to clarify some of the trickier issues in this area. Their guidance covers the following issues:
- Zero hours workers – the ACAS guidance confirms that employees receiving no pay at all during the relevant pay period (such as zero hours workers who were not working during the relevant period) should be excluded from the gender pay gap calculations as they do not count as “full pay relevant employees”. The “relevant period” is the pay period in which the 5 April snap shot date falls. This is good news for employers as including staff who were not being paid in the relevant period could distort their gender pay gap figures.
- Recruitment and retention payments – The Regulations were unclear whether these should be included in the ordinary pay or bonus pay calculations. The ACAS guidance has confirmed that they should only be included in ordinary pay calculations if they are paid as a regular allowance. Where recruitment and retention payments are made as a “one off” incentive payment, they should be included in the bonus pay calculation.
- Bonuses paid in securities, interests in securities or securities options – The Regulations require employers to include these in bonus calculations at the point that the employee is charged income tax upon them. However the Regulations were not clear what to do with securities under tax advantaged schemes, such as share incentives, which do not give rise to income tax charges. The ACAS guidance has now clarified that these should not be included in bonus pay calculations.
- When to publish – The Regulations give employers a year in which to publish their GPG figures, however the ACAS guidance suggests that employers should publish their results as soon as reasonably possible after the snapshot date. Although employers are not required to comply with this, ACAS does make some valid arguments in favour of producing the figures shortly after the snapshot date, including encouraging early action to tackle any gaps and allowing time for the implementation of any changes before for the next GPG snapshot date.
- Communication of any action plans to employees – ACAS recommends that where the GPG report leads to an action plan to reduce the gap going forwards, employers must make sure to communicate this effectively and consistently with their line managers. They should follow any information and consultation arrangements (where there are recognised Trade Unions), and also allow employees to have an input into any action plan such as through focus groups or suggestion boxes.
The new GPG obligations have thrown up a lot of issues for organisations in terms of how to carry out the calculations or how to prepare the GPG report. For assistance with these calculations, the report or the narrative writing, please speak to our Employment Group.
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