Subject to Parliamentary approval, gender pay reporting legislation looks likely to come into force in April 2017. The legislation will require private and voluntary employers with 250 or more employees (as of 5 April 2017) to publish calculations outlining the pay gap between their male and female employees in an attempt to start to address the gender pay gap. It is expected that the obligation to report will include the public sector by April 2017. Current Office for National Statistics figures show that the current gender pay gap in the UK for full time workers is 9.4%.
It is important to note that the term employee has a wide definition for the purposes of gender pay reporting and may include the following:
- Employees with a contract of employment (including part time workers and those who job share);
- Workers and agency workers with a contract to do work or provide services;
- Those who are self employed where they personally perform the work;
Gender pay reporting is not the same as an equal pay audit. Equal pay addresses pay differences for men and women who carry out the same or similar jobs or work of equal value. The gender pay gap will show the difference in average pay between all men and women in a workforce.
The current proposal is that private and voluntary sector employers with 250 or more employees will be required to publish on their own website and a government website the following calculations before 4 April 2018 and annually thereafter;
- 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;
- Proportion of males and females when divided into four groups ordered from lowest to highest pay.
These calculations will need to be accompanied by a written statement confirming the information is accurate by an appropriate senior representative for the employer, such as the chief executive or partner. Employers may also choose to provide an explanation of the results by way of a narrative which will support and encourage action. This gives the employer the opportunity to both explain the results and give details of what action is either being taken, or highlight proposed plans to reduce future gender pay gap calculations. This also allows employers to highlight low gender pay gaps and/or changes in policy which have impacted on the calculations year on year.
Information must be maintained on the employer’s website for a period of 3 years. Employers may wish to maintain gender pay gap information for longer than 3 years to show their progress in addressing the gender pay gap.
Benefits of gender pay reporting
Although only employers with 250 or more employees will be required to publish gender pay gap calculations, smaller employers may wish to publish their calculations as low gender pay gaps may improve relations between their employees increasing productivity as employees may feel more valued. Further, low gender pay gaps may increase the amount female candidates for vacancies thereby creating a wider range of candidates to recruit from. A well written narrative highlighting policy to reduce gender pay gaps may be good publicity for customers and clients, as it builds a reputation for the employer demonstrating that they are ethical and fair.
Failure to report
As it is a legal requirement for all employers with 250 or more employees to publish their gender pay report, if an employer fails to publish their report then not only is this unlawful but this may also be damaging to their reputation, as employers may be viewed as not being transparent about their gender pay gap.
Although the calculations are not required for 12 months employers should aim to publish their results as soon as practical as this will identify pay gaps and encourage an employer to produce appropriate policy thereby tackling the gender pay gap earlier.
For further information, please refer to the ACAS Practical Advice >> http://www.acas.org.uk/index.aspx?articleid=5768