2 February 2017

Equality Act 2010 (Gender Pay Gap Information) Regulations 2016

Are you aware of the forthcoming employment legislation that will affect your organisation?

Although there is still uncertainty over the detail of gender pay gap reporting, there are steps which employers can take now to prepare for the implementation of these Regulations. 

The draft Equality Act 2010 (Gender Pay Gap Information) Regulations 2016 set out the details for the gender pay gap reporting duty and requires employers to publish information showing whether or not there are differences in pay between male and female employees. Companies should already be collecting some of this data.

Under the draft Regulations, employers who have 250 or more employees as of April 2017 will be required to publish:

• the difference in mean pay between male and female employees;
• the difference in median pay between male and female employees;
• the difference in mean bonus pay between male and female employees;
• the proportion of male and female employees who received bonus pay;
• the number of male and female employees in each quartile of their pay distribution.

All bonuses should be included for this regardless of whether the bonus is discretionary or contractual.

For the purpose of the draft Regulations, 'pay' is defined as including:

• Basic pay,
• Paid leave, maternity pay and sick pay
• Area or other allowances
• Shift premium and
• Bonuses

It is not intended at present that pay will include:

• Overtime
• Expenses
• Benefits in kind
• Redundancy pay
• Tax credits
• The value of salary-sacrifice schemes
• Arrears of pay

Which employees does this include?

• All employees (including apprentices)
• Workers who have personal contracts to do work
• May incorporate self-employed workers or non-PAYE workers

It is unlikely however that you will need to include agency workers or contractors. 

The first set of calculations will be based on data for a specific pay period in April 2017 and then every April going forward. The gender pay gap information will need to be published by organisations within 12 months of the pay period; so in the first instance by April 2018.

The first set of information which is to be published on this point will be based on the bonus payments made during the year preceding the relevant pay period of April 2017, therefore it will include those bonus payments which have been made since April 2016.

The Gender Pay Gap Information will have to be:

• Published on the employer's website
• In English
• Accompanied with a signed statement confirming that the information is accurate
• Remain available on the website for at least 3 years
• Uploaded to a government website

The Regulations don't require employers to provide a narrative to accompany the data, most will want to provide some explanation of their figures and to publicise any steps that are being taken to address any issues disclosed. Further guidance on what should be included in any narrative will hopefully be published by the end of this year, but you may want to give some consideration now as to what information you will want to add to any report to help put your figures into context.

The Regulations require employers to publish this information, though they don't include an enforcement mechanism or any sanctions for non-compliance. Although the Government have indicated that they will closely monitor compliance to ensure that the measures are effective. It may even 'name and shame' employers who have failed to comply with the duty.

Regardless of the lack of sanctions for non-compliance, employers should consider the potential damage to their reputation amongst customers and future employees. An employer who publishes the required information, along with an explanation putting the figures into context, together with details of steps to address any gap, is likely to be much more attractive to potential future employees. 

Find below a guide to download in order for you to be proactive and start preparing for the forthcoming legislation.