Gender pay gap reporting - frequently asked questions
A summary of frequently asked questions relating to the draft Equality Act 2010 (Gender Pay Gap Information) Regulations 2016.
The information contained below is based on the draft Equality Act 2010 (Gender Pay Gap Information) Regulations 2016 which were published in a consultation paper in February 2016. The final regulations are yet to be published. These Frequently Asked Questions are therefore subject to change.
Who does gender pay gap reporting apply to?
Employers with over 250 ‘relevant employees’ must produce gender pay gap reports. This will include companies, partnerships, unincorporated bodies and limited partnerships. It is currently uncertain whether public sector employers will be excluded and further consultation is expected on this.
Which employees need to be counted?
Under the draft regulations, ‘relevant employee’ applies only to those workers who ordinarily work in Great Britain and who have contracts of employment governed by UK legislation.
However, it has been suggested that the Government intends the regulations to apply to employees in a wider sense which would bring in LLP members and some self-employed contractors. We await clarification on this.
What information will a business need to publish?
- Your gender pay gap figures (calculated using both the mean and median average hourly pay).
- The number of men and women within each of the four quartiles set by the draft regulations.
- The difference between the men and women’s mean bonuses.
- The proportion of men and women who received a bonus.
There is also an option for an employer to include a narrative statement. This is likely to be strongly encouraged and could explain the following:
- Details of an employer’s various bonus schemes.
- The number of people on maternity leave/ adoption leave/ parental leave and their gender.
- Discrepancies in pay across the organisation.
- What action is being taken by the employer to reduce the pay gap.
- The extent that overtime is routinely worked.
When will a business need to publish this information?
Employers must analyse their gender pay gap each April, commencing in April 2017. The report must then be published within the next year (12 months).
When and how will the figures need to be published?
The information must be published on the employer’s own website and the information must be retained online for 3 years. Employers must ensure the writing is in English and presented in a manner accessible to both employees and the public. The information must also be uploaded to a Government-sponsored website.
A written statement of accuracy must accompany the gender pay gap information. For companies, this must be signed by a director, for LLPs a designated member and for partnerships a partner or the most senior employee of the employer.
Are there any sanctions for non-compliance?
Currently the Government are not planning to implement a civil enforcement mechanism. They are, however, intending to run periodic checks, highlight employers publishing particularly full information and also those who possibly aren’t.
What steps can a business take at the moment?
- Identify any areas of uncertainty over which members of staff may need to be included.
- Ensure data is readily available.
- Consider the remuneration packages offered and consider which elements are reportable.
- Carry out an audit of bonus schemes and consider which will need to be reported.
- Conduct preliminary calculations to give you an idea of the size of any gender pay gap the business is likely to see.
- Ensure those who will sign the written statement are familiar with the regulations.
Is there any further guidance?
The Government will produce guidance with the final regulations which will assist employers with compliance. In particular this guidance should clarify some of the uncertainties which surround the definition of ‘pay’ and ‘relevant employee.’ It should also provide more detailed information on publication requirements.