From April 2017, employers with at least 250 employees will need to publish details of their gender pay gap on a publicly accessible website on an annual basis.
The information that employers must report on will include differences in mean and median hourly pay and bonuses between men and women as well as the proportion of women in each pay quartile within the organisation.
The information will need to remain on the website, accessible to employees and the public, for at least three years and also be uploaded to a central government website to enable easy comparison with other employers.
It is likely to be looked at by employees and their representatives, potential job applicants and, in some cases, by clients.
Employers will have until 4 April 2018 to publish their first set of data, but it must be based on a snapshot of pay data as at 5 April 2017.
The requirements are set out in the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 (SI 2017/172) (2017 Regulations). The details are complex and employers that have not already done so should start to plan now, to ensure that they are in a position to comply with the 2017 Regulations and to explain the gender pay gap, which most in-scope employers are likely to have to disclose.
The gender pay gap in the UK economy as a whole currently stands at 18.1 % according to the latest figures from the Office for National Statistics (ONS) from April 2016. This represents the difference between the median hourly rate of pay for women, compared to men, looking across the economy as a whole. Similar gender pay gaps exist at a micro level within organisations.
This does not necessarily mean that employers are discriminating against women by paying them less for equal work, although this can be one of the causes of a gender pay gap.
A report published by the House of Commons Women and Equalities Committee in March 2016 summarises the key causes of the gender pay gap (www.publications.parliament.uk/pa/cm201516/cmselect/cmwomeq/584/584.pdf). They include the fact that women tend to be concentrated in lower grades within organisations and in lower paid occupational sectors. Women are also more likely to have taken career breaks and to work part time. The gender pay gap measures the gap in pay per hour and so strips out any difference in pay based purely on the number of hours worked. But, as discussed in the report, full-time working correlates to progression, which is to say that working part-time has a long-term curbing effect on women's incomes.
In 2011, the government introduced a scheme for employers to publish this information voluntarily, but very few employers did so.
The government's view is that the gender pay gap is not reducing quickly enough, and that existing initiatives have not achieved sufficient progress. In July 2015, the government consulted on plans to introduce mandatory gender pay gap reporting (the consultation) (see News brief "Gender pay reporting: disclosing and closing the gap"). It believes that requiring employers to publish details of their gender pay gap will accelerate progress by incentivising employers to analyse the drivers behind it, and take action aimed at reducing it.
METRICS AND CALCULATIONS
The 2017 Regulations set out in detail the information to be reported by organisations and how it is to be calculated. Acas and the Government Equalities Office (GEO) have published joint guidance for employers.
The compulsory metrics
Employers must publish six compulsory metrics:
- The difference in mean hourly pay between male and female employees, expressed as a percentage.
- The difference in median hourly pay between male and female employees, expressed as a percentage.
- The difference in mean bonus pay between male and female employees over a period of 12 months, expressed as a percentage.
- The difference in median bonus pay between male and female employees over a period of 12 months, expressed as a percentage.
- The proportion of male and female employees who received bonus pay during the 12-month period.
- The proportion of male and female employees in each quartile pay band (regulation 2(1), 2017 Regulations).
This article is based on a report first published on the Practical Law website on 2 March 2017 and is reproduced with the permission of Thomson Reuters.
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