The Government’s Gender Pay Gap Reporting regime is well underway. In an effort to tackle the disparity of pay between men and women, it asks that companies report data regarding the earnings of their male and female employees.
The initiative has already made national headlines, with the BBC coming under scrutiny after publishing data highlighting a stark imbalance in payment between individual male and female presenters. With the broadcaster vowing to take action to address the disparity, the Government is hoping that it will have a similar impact on UK organisations as a whole.
Gender Pay Gap Reporting – is my organisation affected?
The Government states that any organisation with a headcount of 250 employees or more is required to comply with the Gender Pay Gap Reporting requirements.
The definition of an employee for this regime is based on the Equality Act 2010, and in certain circumstances you may also need to take into account the earnings of those who don’t necessarily have a contract of employment with your organisation. This includes:
• Workers and agency workers
• Self-employed people who are personally required to perform the work
Reporting is optional for any company that employs less than 250 employees, though employers are advised to consider the benefits to doing so, which we explain later.
What does my business need to report, and when?
The regime requires that businesses report six calculations to Government, each of which also need to be published on their own company website. These are:
• The mean gender pay gap in terms of hourly pay
• The median gender pay gap in terms of hourly pay
• The mean bonus gender pay gap
• The median bonus gender pay gap
• The proportion of males and females receiving a bonus
• The proportion of males and females in each pay quartile
This needs to be accompanied by a written statement on your company website confirming the accuracy of your calculations. You also have the option to provide a narrative with the calculations. This may explain the reasons for the results, and detail any actions that are being taken to reduce any disparity, if required.
The initiative was implemented on 5 April 2017 for private sector businesses and charities. The Government refers to this as the ‘snapshot date’, from which point your organisation has a year to publish the required information – meaning the deadline each year is 4 April. For public sector organisations the snapshot date is 31 March.
What does Gender Pay Gap Reporting mean for my business?
Whilst the Government say s that employers are required by law to publish the information required by the initiative, there isn’t actually a penalty for non-compliance. However, although your firm won’t necessarily suffer financially from not playing by the rules, you need to consider the impact it can have on your company’s brand image.
The regime has obviously placed the disparity of pay between males and females under the spotlight, and the onus is now on businesses to demonstrate transparency. Potential employees are increasingly seeking insights about prospective employers online, and there are now multiple websites enabling employees to anonymously post reviews of their employers online.
This means the image you portray within your company is equally important as the one you project to the public, and so refusal to comply with the Gender Pay Gap Reporting requirements could leave a serious black mark next to your company name in the eyes of many people.
The gender pay gap is distinct from equal pay, under which employers are required to give men and women equal treatment in terms of pay and working conditions if they are considered to be carrying out similar jobs. However, this initiative could prove to be an eye-opener for some organisations with a particularly high gender pay gap, who may have to reconsider their wage structure.
For further guidance on Gender Pay Gap Reporting, see the Government’s online resources, or get in touch with us.
This article is written for general interest only and is not a substitute for consulting the relevant legislation or taking professional advice. The authors and the firm cannot accept any responsibility for loss arising from any person acting or refraining from acting on the basis of the material included herein.