Newsflash: Gender pay gap – more details released

mind-the-gapWhat do we already know?

In our November 2015 Newsflash Mind the gap! we updated you on the Government’s plan to require employers with more than 250 staff to publish their gender pay gap and that the Government’s consultation process on this closed on 6 September 2015.

What’s new?

The Government has published its response to the above consultation, available here. It has also issued a second consultation available here which includes the draft Equality Act (Gender Pay Gap Information) Regulations 2016. These set out the proposed framework for the new gender pay reporting requirements. The consultation closes on 11 March 2016.

The Government’s response confirms that the regulations are likely to come into force on 1 October 2016, with a first reporting date of not later than 1 April 2018.

In summary, employers with 250 or more employees will have to report, on an annual basis:

  • the mean average and median average overall pay gap figures (including bonus, commission, LTIPs and the cash value of shares); and
  • mean average bonus gap figures.

In addition, affected employers must also publish the numbers of men and women paid across salary quartiles within their business and the proportion of men and women who received a bonus payment within a 12-month period.

The full pay report information must be published on the employer’s website every year, and left there for at least three years, and must also upload the information to the Government. The Government proposes that employers who do not comply should be ‘named and shamed’, and it will review whether civil or criminal penalties for non-compliance should be introduced in due course.

Given the importance and complexity of the new gender pay gap reporting regime we will provide more detail in our February 2016 Newsletter and in a series of Gender Pay Gap blogs, out soon.

What should you do?

If you have 250+ employees but you haven’t already started to take action, it’s definitely time to ‘mend the gap’.

The fact that we now know the legislation will be coming into force in October does not mean that you should be waiting to see what will happen. You need to know your gender pay gap now, so that you can consider and plan what to do about it. When the likely deluge of equal pay claims starts, you don’t want to be caught with your metaphorical trousers round your ankles – you will want to already know your risk areas and already have taken steps to close high risk gaps and plan your communications, internal and external.

Doing nothing at this stage is really not an option, we suggest!

We are keen to help you prepare, plan and take action to know and reduce your equal pay risks through our Gender Pay Gap Audit & Advice service, delivered in association with Smith & Williamson, the national accountancy firm. Our equal pay legal experts are partnering with their pay & reward experts to provide you with a comprehensive solution to your need to audit, identify and deal with the legal, financial and risk management implications of your gender pay gap.

For more information, please read on or contact our Director, Luke Menzies.