How to mind the gender pay gap

15 December, 2016
by: Cripps Pemberton Greenish

Following my blog on 18 February 2016, on gender pay rEmployment - gender payeporting (https://www.crippspg.co.uk/employment/gender-pay-reporting-what-employers-need-to-know/), the government have published the final draft of the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017. 

From 6 April 2017, employers with 250 or more employees on 5 April 2017 will be required to publish information about the gender pay gap in their organisation. 

Employers who meet the 250 employee threshold will need to publish:

  • the difference in the average and median salary for male and female employees;
  • the difference in the average and median bonus pay to male and female employees;
  • the proportion of male and female employees paid a bonus in the previous year; and
  • the numbers of male and female employees in each of four quartile pay bands.

The date to report is within a year from the snapshot date of 5 April 2017. This means that the first gender pay report will need to be published by 4 April 2018 based on the hourly rates on 5 April 2017 and with reference to bonus payments made between 6 April 2016 and 5 April 2017. 

When the information has been calculated, it must be published on the organisation’s website with an accuracy statement from a director and be kept public for at least 3 years. 

Who is included?

  • Employees will include those with employment contracts, apprentices and those with a contract personally to do work.
  • This would include independent contractors within the 250 but the employer will not need to include this in the figures if it would not be reasonably practicable to obtain it.
  • Partners do count as part of the 250 but they are not included in the calculation.

Who is not included?

  • Those on leave will not be included. This is intended to remove those on sick pay or maternity pay from the calculation but it could mean that those on annual leave are discounted.

What is the effect of non-compliance?

There are no penalties for non-compliance but the reputational damage could harm the organisation. 

The regulations simply state that failure to comply is an unlawful act under s. 34 Equality Act 2006. This means that the Equality and Human Rights Commission may have to monitor the employer’s compliance and take enforcement action where necessary.  

While the gender pay gap and equal pay are separate issues, if a female employee is notified that her employer has a poor gender pay gap then she might seek to claim that she is not receiving equal pay to a male comparator. The remedy would be payment in arrears for the underpayment claimed, which can be very costly if there are multiple claims.

Advice to employers

  • Sort out who will be in charge of the calculation and decide how they will compile the data.
  • Run a test calculation now to see what your gender pay gap is and assess whether you will be able to alter your recruitment before the 5 April 2017 snapshot day.
  • While there is no legal obligation to publish an explanation with the results, it may help to explain whether there is some part of the calculation that has skewed the results.
  • Consider whether to publish results for different age groups or job roles. This could show that your gender pay gap is improving and that major improvements are on the horizon.