Gender Pay Gap Reporting
In early 2016, the Government is due to publish draft Regulations requiring larger employers to publish information showing whether or not there are differences in gender pay. Companies will have to publish information about the difference in pay between male and female employees, giving:
• a single annual figure setting out the gender pay gap based on a standard set of data;
• the method of calculation for the whole workforce.
A second level of reporting is also likely to include a separate figure on the gender bonus gap. In addition, employers will be able to provide commentary explaining the factors that contribute to their gender pay gap and actions they are taking to close the gap.
The regulations will apply to all private, public and voluntary sector employers in England, Wales and Scotland with 250 or more employees.
There is not, as yet, an exact date for the introduction of this gender pay reporting. However, it appears that the requirement could be introduced on a phased basis with larger employers required to carry out gender pay reporting before smaller employers.
What is the gender pay gap?
The Equal Pay Portal defines the gender pay gap as being “a calculation of the difference in the average earnings of the women and men in any given population. What we generally think of as “the gender pay gap” is the difference in the average hourly earnings of male and female full-time employees in the UK labour market as a whole.”
With the latest figures from the Office of National Statistics showing that, overall, women in the UK earn 19% less than men, these new measures aim to eradicate gender inequality in the workplace and remove barriers to women’s success.
Paying men and women different amounts for equal or similar work has been illegal for over 40 years, but the average pay gap exists particularly among older workers reflecting, according to the government: "the types of jobs that women tend to enter, and the levels of seniority they progress to”.
How will the gender pay gap be calculated?
This decision falls within the remit of the Government Equalities Office (GEO) and it is not known just yet. However, it is believed that the GEO will opt for median figures based on gross pay per hour and exclude extra payments such as overtime.
How can companies prepare for gender pay gap reporting?
Although no firm date has been set for gender pay gap reporting, employers who have not yet conducted equal pay audits may wish to consider doing so on an informal basis in advance of any formal regulatory requirement. Aside from giving a better understanding of what the proposed legislation is likely to entail, it will also enable employers to identify potential issues in advance and to take steps to begin addressing these issues in good time.
Simply-docs will provide an update on the Regulations when further details are available.
The contents of this Newsletter are for reference purposes only and do not constitute legal advice. Independent legal advice should be sought in relation to any specific legal matter.