The government has published in draft The Equality Act (Gender Pay Gap information) Regulations 2016. These set out the framework for the new gender pay reporting requirements.
So who will this impact?
The reporting obligation will apply to private, voluntary and public sector employers in the UK with at least 250 employees.
What are the requirements?
Employers will be required to publish the following information:-
- The overall mean and median gender pay gap across their workforce, using an hourly pay rate for each relevant employee. “Pay” for these purposes is defined broadly and includes basic pay, paid leave, maternity pay, sick pay and most allowances such as car allowances, shift premium pay and bonuses. However overtime, the value of salary sacrifice schemes and benefits in kind will not be included as part of the calculation.
- The difference between the mean bonus payments made to men and women. The number of men and women in each quartile of the employer’s pay distribution. This is intended to illustrate whether female employees are concentrated in a particular way in terms of their remuneration, which would potentially indicate impediments to career progression.
- Employers will have the option to publish a narrative to accompany the pay gap information.
Where is the information to be published?
The information must be published on a searchable UK website that is accessible to employees and the public and then maintained for at least three years to allow progress to be tracked. The information must also be uploaded to a government website.
Is there to be any ‘penalty’ for non-compliance?
The plan to introduce a civil penalty in the form of a fine has been replaced with a focus on ‘naming and shaming’ the employers who fail to comply. There is no specific penalty for non-compliance at the moment but this will be kept under review.
So what happens next?
The draft regulations are subject to a consultation that will close on 11 March 2016. The draft regulations are scheduled to take effect on 1 October 2016. Employers will be required to prepare a preliminary data snapshot showing the gender pay position as at 30 April 2017 and the detailed pay information must then be calculated and published on a date of the employer’s choosing but by April 2018 at the latest.
It will be interesting to see how the implementation of the Regulations is carried out, if the website will be up and running on time, and also how many Employers will actually feel threatened enough by the “naming and shaming” to even comply with the Regulations.
Samantha Simpson – Trainee Solicitor