In September last year the Government concluded its consultation on regulations which will require companies with 250 or more employees to carry out an equal pay review and publish their gender pay gap. After much discussion about how the data will be presented and calculated, the Government has published the draft The Equality Act (Gender Pay Gap Information) Regulations 2016. Supporting guidance will be published later this year to help employers implement the framework. We set out a summary of the key provisions below.
Important dates for employers
The draft Regulations will be open for consultation until the 11 March and it is envisaged that the Regulations will come into force 1 October 2016. Employers will not need to publish their first report for up to 18 months from the commencement date of the Regulations. The 30th April 2017 will be the first snapshot date for which employers will need to calculate the relevant pay gap data. So providing the Regulations come into force 1 October 2016, Employers will have until the 30th April 2018 to actually publish their first gender pay report. Thereafter, employers will be required to publish their gender pay statistics every 12 months.
What statistics will employer have to publish?
The Regulations will require employers to publish three types of gender pay data. Firstly, the mean and median gender pay figures for the entire organisation. Secondly, how many men and women appear in each quartile of their pay distribution. Thirdly, if employers award bonuses to their employees they will need to publish the difference between the mean bonus payments paid to men and women. They will also be required to publish the proportion of male and female employees that received a bonus.
How will employers calculate ‘pay’?
Pay will be calculated according to the methodology that the Office of National Statistics use in their Annual Survey of Hours and Earnings. This will include basic salary, paid leave, maternity pay, sick pay, area allowances, shift premium pay, bonus pay and other pay like car allowances paid through payroll, on call and standby allowances. It will not include things like overtime pay, expenses, the value of salary sacrifice schemes, benefits in kind, redundancy pay , arrears of pay and tax credits.
Where will employers publish this information?
Employers will need to produce a written statement accompanying the report which confirms the information is accurate. They must publish this information on their UK website and it must be kept available for at least 3 years. In addition the report must be uploaded to a Government – sponsored website. This will allow the Government to not only monitor compliance and non- compliance but whether any progress is being made after the initial years of implementation.
We will blog further on this topic when the Government publish the supporting guidance and the final Regulations. If you need any help in ensuring that your organisation complies with these new obligations then please do not hesitate to get in touch with us.
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