Mandatory gender pay reporting regulations published

The UK government has published the draft Equality Act 2010 (Gender Pay Gap Information) Regulations 2016 with major implications for large employers.  Public consultation on the draft regulation will remain open until 11 March 2016.

Background

According to the Office for National Statistics (ONS), women in the UK earn on average 20% less than men.  To help combat this, in July 2015 the government announced plans to make annual gender pay reporting mandatory for employers with over 250 employees.

Latest development

The Equality Act 2010 (Gender Pay Gap Information) Regulations 2016 (the “Regulations”) are expected to come into force on 1 October 2016.  The consultation document states that the Regulations apply to private and voluntary sector employers in England, Wales and Scotland with 250 or more employees.

The Regulations will require such employers to monitor their gender pay gap from 30 April 2017 and publish the following details by 30 April 2018 (and annually thereafter):

• 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 during the preceding 12 months between male and female employees;
• the proportion of male and female employees who received bonus pay during the preceding 12 months; and
• how many men and women appear in each quartile of pay in the workforce.

This information must be published on the employer’s website and a government-sponsored website, and must be accompanied by a written statement confirming that the information is accurate.  Employers will be required to retain this information online for three years.

Under the Regulations “pay” includes basic pay, paid leave, maternity pay, sick pay, area allowances, shift premium pay, bonus pay and other pay (including car allowances paid through the payroll, on call and standby allowances, clothing, first aider or fire warden allowances).

Are public sector employers covered?

In November 2015 the government indicated its intention to extend the obligation to publish gender pay data to include public sector employers.  The consultation document suggests that only private and voluntary sector employers are covered by these Regulations and that further consultation will be required on this commitment.

However, it is worth noting that the definition of relevant employer in the Regulations is wide enough to cover all employers with 250 or more employees (whether public, private or voluntary sector).  Whether public sector employers are covered by the Regulations (or by separate later legislation) will no doubt be clarified following consultation.

Next steps

The government acknowledges that employers will need some time to prepare for this change, which is why they will have approximately 18 months after commencement of the Regulations to publish the required information for the first time.

Any organisations who will, or are likely to, employ 250 or more employees by 30 April 2017 should take steps now to introduce new systems or processes to analyse their gender pay gaps.

Further Information

If you have any questions about how the Regulations could impact your business, how to comply with the new obligations, or if you need help in introducing appropriate processes to analyse your gender pay gap, please get in touch.

Further reading

Mandatory Gender Pay Gap Reporting Government Consultation on Draft Regulations