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Gender Pay Gap Reporting Briefing

Posted on 21st February 2017
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If your organisation has 250 or more employees on the snapshot date of 5 April 2017 then you will have to comply with the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 (‘GPG Regulations’). This briefing is a summary of the aims of the GPG Regulations and how employers must comply with them.

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Marsha Robinson Marsha
Robinson
Solicitor Telephone: 01473694403
What is the gender pay gap?

The gender pay gap is different from equal pay. The obligation to pay men and women the same for carrying out the same or similar jobs or for carrying out work of an equal value is known as equal pay. Failing to pay equally is unlawful.  The gender pay gap shows the difference between the earnings of men and women (calculated on a mean and median basis). 

If your organisation falls within the reporting requirements and shows a gender pay gap this does not necessarily mean you are discriminating against either men or women or that you are failing to pay equal pay.  Statistics tend to show that there remains a gender pay gap, with men being paid more than women.  As you would expect, ‘the gap’ varies by sector (and in some cases men are paid less than women, although this is less common). In 2016, according to the Office for National Statistics, women were paid 9.4% less than men for full time employment.  The gap increases to 18.1% when taking into account all employment.  Pro-rata part time workers (men and women) earn less than full time workers, with women more likely to work part time than men.

What is the aim of establishing any gender pay gap?

The aim of government is for the reporting to be used to assess how effectively talent is being used within the workplace and, if there is a gap, for organisations to consider the reasons for that gap and how it can be addressed.

What are the reporting requirements?

An employer with 250 or more employees on the snapshot date of 5 April 2017 will be subject to the reporting requirements. The first report must be submitted by 4 April 2018.  To whom the report has to be submitted is yet to be announced. It must also be published on the organisation's own website.

The definition of “employees” is wide, for example it includes casual workers and bank staff, as well as those engaged under a zero hours contract. Some contractors and self-employed individuals as well as employees working abroad will also be included in the total.  If you are close to the threshold of 250 employees you should seek advice about who is and is not included to ensure you do not inadvertently fail to report.

The following information must be calculated and published:

  • The mean gender pay gap.
  • The median gender pay gap.
  • The mean bonus pay gap.
  • The median bonus pay gap.
  • The proportion of men receiving a bonus payment.
  • The proportion of women receiving bonus payment.
  • The proportion of men and women in each salary quartile band.
  • A written statement, authorised by a senior person with appropriate authority, confirming the accuracy of the publication.
The calculations are complex and the requirements specific.

The mean figure is required to give an overall indication of the gender pay gap.  As this figure could be distorted where, for example, bonuses are only paid to board members or very few people, a median figure is also required.  The theory is that the median figure indicates the reality in the middle of an organisation.

The government also requires the written statement.  Guidance produced jointly by Acas and the Government Equalities Office (‘GEO’), currently in draft, states that as a minimum the statement must confirm the information is correct.  It should also contain a supporting narrative, explaining any apparent gender pay gap and what measures are being taken to address the gap, but this is voluntary.

Failure to comply with the reporting requirements

There are no enforcement provisions within the GPG Regulations for failing to report so there will be no automatic penalties imposed.  However, a failure to comply could be seen as an ”unlawful act” of discrimination for the purposes of section 20 of the Equality Act 2006. In these cases the Equality and Human Rights Commission (‘EHRC’) is empowered to take enforcement action, although whether it has the resources and inclination to do so remains to be seen.

Benefits to businesses

Acas and the GEO emphasise that the aim of the GPG Regulations is to encourage gender diversity and equality, allowing employers to help staff to reach their full potential and so lead to greater productivity and increased financial returns. 

Voluntary initiative

Many employers will not be required to publish gender pay gap information as they do not employ 250 or more employees.  As an alternative there is a voluntary initiative called Think, Act, Report... which provides employers with a framework to formulate an action plan to assist in closing the gender pay gap.  More information is available at www.gov.uk/think-act-report.

If you believe you may fall within the reporting requirements and require assistance please contact Marsha Robinson, who is one of the specialist employment law solicitors at Quantrills.

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