Gender pay gap reporting obligations

February 2, 2017, By

The Gender Pay Gap Regulations are expected to come into force on 6th April 2017.

This will mean that large private and voluntary sector employers (those with 250 or more employees on 5th April of each year) will be required to analyse their gender pay gap each April, and publish a report on the findings no later than 4th April 2018.

What counts as ‘pay’?

‘Pay’ is defined as basic pay, bonuses, allowances, pay for piecework, pay for fully paid leave and shift premiums.

It excludes overtime pay, expenses, benefits in kind and the value of salary sacrifice schemes.

Although it is not expressly stated in the Regulations, it also appears that employer’s pension contributions are intended to be excluded from the definition of “ordinary pay”. 

Who counts as an employee?

Employees and those classed as ‘workers’ will be counted. Casual workers or bank staff who are engaged directly by a relevant employer will also fall within the scope of the Gender Pay Gap Regulations. This includes workers engaged under umbrella contracts or a zero hours contract.

Contractors may also be caught by the Regulations if they are employed under a contract that obliges them to perform the work personally, for and under the direction of another person. Agency workers will however be generally regarded as employed by the employment business that supplies them, rather than by the end user. 

What must be reported?

Affected businesses must then subsequently produce and publish an annual report showing:

–              Overall gender pay gap figures for relevant employees, calculated using both the mean and median average hourly pay.

–              The proportion of men and women in each of four pay bands, based on the employer’s overall pay range.

–              Details on the employer’s gender bonus gap  and the proportion of male and female employees who received a bonus in the same 12-month period.

Employers will have the option to include a narrative explaining any pay gaps or other disparities, and setting out what action, if any, they plan to take to address them.

A written statement confirming that the gender pay gap information is accurate must also accompany the information. This must be signed by a senior individual. For companies this is a director or equivalent. For LLPs, a designated member. For limited partnerships, a general partner and for partnerships, a partner.

Employers must publish the information on their own website and must also retain the information online for 3 years. Employers must also upload the information to a government website (details of this website have not yet been published). 

When must it be reported?

The Regulations allow employers to analyse and publish the required information any time within 12 months of the snapshot date. The first snapshot date is 5th April 2017, and so employers have until 4th April 2018 to publish their first gender pay gap information. 

Is the public sector affected?

Similar reporting obligations for public sector employers in England, and non-devolved public organisations operating across Great Britain, will be introduced from 31 March 2017. 

Does this replace existing equal pay laws?

The gender pay gap differs from equal pay. The gender pay gap shows the differences in the average pay between men and women working for large employers whilst it remains unlawful under the Equality Act 2010 to pay individuals unequally because of their gender. It thus remains to be seen whether the threat of negative publicity alone will be a motivator for culpable employers to improve their practices.