The government has published
in draft The Equality Act (Gender Pay Gap
information) Regulations 2016. These set out the framework for the new gender
pay reporting requirements.
So
who will this impact?
The reporting obligation
will apply to private, voluntary and public sector employers in the UK with at
least 250 employees.
What
are the requirements?
Employers will be required
to publish the following information:-
- The overall mean and median gender pay gap across their workforce, using an hourly pay rate for each relevant employee. “Pay” for these purposes is defined broadly and includes basic pay, paid leave, maternity pay, sick pay and most allowances such as car allowances, shift premium pay and bonuses. However overtime, the value of salary sacrifice schemes and benefits in kind will not be included as part of the calculation.
- The difference between the mean bonus payments made to men and women. The number of men and women in each quartile of the employer’s pay distribution. This is intended to illustrate whether female employees are concentrated in a particular way in terms of their remuneration, which would potentially indicate impediments to career progression.
- Employers will have the option to publish a narrative to accompany the pay gap information.
Where
is the information to be published?
The information must be
published on a searchable UK website that is accessible to employees and the
public and then maintained for at least three years to allow progress to be
tracked. The information must also be uploaded to a government website.
Is
there to be any ‘penalty’ for non-compliance?
The plan to introduce a
civil penalty in the form of a fine has been replaced with a focus on ‘naming
and shaming’ the employers who fail to comply. There is no specific penalty for
non-compliance at the moment but this will be kept under review.
So
what happens next?
The draft regulations are
subject to a consultation that will close on 11 March 2016. The draft
regulations are scheduled to take effect on 1 October 2016. Employers will be
required to prepare a preliminary data snapshot showing the gender pay position
as at 30 April 2017 and the detailed pay information must then be calculated
and published on a date of the employer’s choosing but by April 2018 at the
latest.
It will be interesting to
see how the implementation of the Regulations is carried out, if the website
will be up and running on time, and also how many Employers will actually feel
threatened enough by the “naming and shaming” to even comply with the
Regulations.
Samantha Simpson - Trainee Solicitor
For further information on Employment Rights please visit our website or call 0033 3344 9603 and ask to speak with our Employment Rights team.
