What do we already know?
We have been keeping you up to date over the past year on the Government’s proposals to introduce mandatory gender pay reporting. For an overview of the reporting requirements see our February 2016 Newsletter Government reforms (2): Gender pay – mend the gap!.
The final draft of the Gender Pay Gap reporting regulations for the private and voluntary sectors (the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017) has been published and will come into force on 6 April 2017, subject to parliamentary approval. (The regulations for the public sector in England are likely to be identical and we will let you know about them as soon as they are confirmed.)
The Government has also published its response to the consultation exercise on these regulations (available here), explaining how it took into account the responses and suggestions made to it. Refreshingly (for these days), the Government appears to have made quite a few changes to its original draft regulations, based on the responses received.
The key changes, following consideration of the responses to the consultation exercise, are:
- The introduction of the concept of a “full-pay relevant employee”, primarily to allow employers to exclude those on sick leave or maternity leave from the hourly pay comparison – which makes much more sense in terms of like-for-like comparisons.
- Overtime pay will continue to be excluded but shift premiums will remain included. (The Government is tight-lipped on why overtime will not be included. Our own view is that it very strange to exclude it, and doing so skews the true figures. It is particularly odd to exclude overtime but include shift premiums.)
- The exclusion of partners in a partnership and members of an LLP.
- A change in the “snapshot date” to 5 April (previously 30 April).
- A clearer definition of bonus pay and a requirement to publish the difference in both the mean and median average bonus figures.
- Clarification of how the quartile pay bands are to be calculated.
- Despite pressure to allow a single publication for a group of businesses (like group accounts), the Government remains committed to publication per legal entity with 250+ employees. We will publish a blog on this issue soon.
- The Government promises that “user-friendly” guidance will be issued (likely to be by ACAS), which will include more detail on which elements of pay and reward are to be included and how.
- To support employers, the Government will shortly commence a media campaign “of myth-busting UK-wide events and multi-media guidance”.
- There will also be “targeted support for smaller employers”.
There is still no clear enforcement mechanism or penalty for a failure to publish the data. However, the consultation response paper suggests that the Equality and Human Rights Commission’s existing enforcement powers will apply so that any employer who does not comply with the regulations will be open to formal investigation by the EHRC.
For all private and voluntary sector employers with 250+ employees, their first gender pay gap report (in respect of their April 2017 pay data) must be published by 4 April 2018 at the very latest and then kept available for three years on their website, as well as being uploaded to a new Government website. Public sector employers are highly likely to be subject to the same duty and more details to confirm this should be forthcoming in the next few weeks.
Our Gender Pay Gap service