Regulations on gender pay gap reporting have now been published and are expected to come into force on 6 April 2017.
The duty to report is triggered when an organisation reaches 250 or more employees. Smaller co-ops with fewer employees therefore have no obligation to report on their gender pay gap, but may wish to consider gathering the data internally in order to benchmark themselves against the national average which currently stands at 18.1%.
What needs to be reported?
In brief, the reporting requirements are to produce an annual report, based on payroll data, setting out:
- The difference in mean average pay between men and women
- The difference in median average pay between men and women
- The proportion of men and women receiving a bonus in the 12 months prior to the snapshot date
- The difference in mean bonus pay between men and women
- The difference in median bonus pay between men and women. (This is an additional requirement)
- The proportion of men and women in each interquartile pay range. (Originally the requirement was to be for actual numbers but this has changed following the consultation)
Who needs to be included in the report?
Organisations are required to take a ‘snapshot’ report of pay by gender as of 5 April of each year. The data should be gathered for all 'relevant employees', meaning anyone who is employed on 5th April and is classed as an employee under the Equality Act 2010. This is a wider definition of employee and includes workers (including those on zero-hours contracts) and some self-employed people. The regulations do make it clear, however, that organisations do not need to include workers where they do not hold the relevant data and it would be impractical for them to source this. Agency workers will be captured by their employing agency.
The headcount of an organisation might rise above and dip below the 250 required by regulation. Organisations should calculate their headcount annually to determine whether it applies to them. That said, the non-statutory guidance will encourage employers whose total headcount dips below 250 to continue to report on a voluntary basis in a spirit of transparency and to allow for ongoing benchmarking. The requirement is individual for each employing entity so group organisations may find that some of their businesses need to report while others do not. It is not sufficient for the parent company to produce an amalgamated report, although some group organisations may choose to do this in addition.
When is the reporting deadline?
The first reporting deadline 4 April 2018. Although the government does not plan to develop any financial sanctions for non-compliance at this stage, impacted employers who fail to comply with the reporting requirements by this date (and annually thereafter) will be committing an ‘unlawful act’ under the Equality Act 2006 leaving themselves open to enforcement activity by the Equality and Human Rights Commission. EHRC enforcement activity could include inquiries, investigations, unlawful act notices, agreements, assessments or compliance notices. The government has committed to keeping this under review with the potential to impose sanctions in the future if there are high levels of non-compliance despite EHRC involvement.
Government intends to publish detailed non-statutory guidance to help employers understand and meet the requirements for gender pay gap reporting and is currently working with ACAS to develop these.
In the meantime, you can find additional information on the changes to the draft regulations in the Government’s response to the consultation, you can use this template developed by Co-operatives UK, and subscribers to Co-operatives UK’s HR Package can contact the HR team for additional support.