There has been much talk in the media recently about the gender pay gap in the UK, and some scrutiny of employers’ performance in shrinking it. This scrutiny is set to intensify for larger employers, with the advent of new regulations requiring them to publish detailed figures on gender pay gaps.
For now, the new regulations (called the Equality Act 2010 (Gender Pay Gap Information) Regulations 2016) are draft form, and reporting is still voluntary. However, with the final version of the regulations expected at the start of October 2016, the clock is set to start running.
Employers will need to establish whether they are affected, how they are affected, what data to collect, and when they need to publish it.
Who is affected?
The first point for employers to find out is whether the new reporting requirements will apply to them. The regulations on who is affected are complex and as yet uncertain, but any private or voluntary-sector employer with over 250 employees and/or casual workers should take advice on this when the final regulations are published.
When are the deadlines?
It’s expected that employers will need to publish information on their gender pay gap by April 2018, giving a ‘snapshot’ of their position at April 2017. Thus, the publication deadline is not urgent, but employers do need to be ready to gather and record this data, and also to consider how to remedy the position, if necessary.
Among the data required will be:
· overall gender pay gap figures, using median and mean hourly rates of pay
· the number of men and women in different pay bands
· information on gender bonus gaps.
How will this affect employers?
As well as gathering data, employers will need to prepare for the possible consequences of publishing it. Although there are no sanctions or enforcement processes in the regulations, the publication of poor figures on gender pay could generate undesirable consequences, including:
· reputational damage among stakeholders
· problems when tendering for public-sector contracts
· discontent among staff about pay practices
· the possibility of claims to Employment Tribunals about equal pay, arising from greater transparency of data.
Given the complexity of the regulations, and their possible consequences, this is certainly not an area where employers can sit back and hope for the best. The publication deadline may be in 2018, but once the final regulations are revealed in October 2016, prompt action is advisable.