The government has released draft regulations on the gender pay gap reporting requirement, pursuant to section 78 of the Equality Act 2010.
After much speculation, these regulations have provided us with some important additional information, namely that:
- Employers with more than 250 employees will be required to calculate their gender pay gap from April 2017, and publish the details by April 2018;
- Both the ‘median gender pay gap’, and ‘mean gender pay gap’ must be published;
- The pay distribution must be divided into four bands, and employers must work out the number of men and women in each quartile. It looks like it will be for the employers to decide for themselves the precise range of the bands;
- An annual date of 30 April has been set in which employers must take a ‘snapshot’ of what employees are being paid, beginning in 2017;
- Employers will also have to publish the difference between their mean bonus payments to men and to women, and the proportion of male and female employees that receive a bonus. This will be taken over a 12 month period rather than as a snapshot;
- The figures must be published on the employer’s website, and signed by a director or equivalent with a written statement confirming that the information is accurate;
- The government will also publish the pay gap by sector in league tables; and
- There will be no specific penalties for non-compliance.
This is a summary of draft regulations which may change. A public consultation on the draft regulations closes on 11th March 2016.
Other than being given a chance to make sure the figures make for good reading, large employers also need to make sure that their payroll systems can actually produce this data. Some systems simply cannot record pay by gender and some may not record gender at all. Practical questions for employers will be whether their payroll system records gender, and whether the records of gender are reliable? If employers do not have a system capable of outputting this data – either by itself or into a spreadsheet for further manipulation - then the one year countdown is on to get things straight.
Consistent with our policy when giving comment and advice on a non-specific basis, we cannot assume legal responsibility for the accuracy of any particular statement. In the case of specific problems we recommend that professional advice be sought.