United Kingdom: Gender Pay Gap Reporting Laws Update, European Labour & Employment Update
A reminder that the government has published its final draft form of the Gender Pay Gap Regulations, which come into force on 6 April 2017. The Regulations oblige relevant employers to report on their gender pay gap on an annual basis, with the first gender pay reports to be published no later than 4 April 2018, based on pay as at the first "snapshot" date of 5 April 2017.
Employers with 250 or more employees on the snapshot date of 5 April must publish an annual report on their gender pay gap. The Regulations do not require group companies to aggregate numbers across different subsidiaries, and as such each group company needs only to report in relation to the employees it employs.
The following gender pay information must be published by reference to 5 April each year:
- the difference between the mean hourly rate of pay for full-pay relevant male and female employees;
- the difference between the median hourly rate of pay for full-pay relevant male and female employees;
- the difference between the mean bonus pay for relevant male and female employees;
- the difference between the median bonus pay for relevant male and female employees;
- the proportions of relevant male and female employees who were paid bonus pay in the relevant 12-month period; and
- the proportions of male and female employees in four, equal sized, notional quartile pay bands.
The first gender pay reports must be published no later than 4 April 2018, based on hourly pay rates as at the first "snapshot date" of 5 April 2017 and bonuses paid between 6 April 2016 and 5 April 2017. Reports will need to be made annually thereafter.
Relevant employers need to publish their gender pay reports on their websites, which must be available for three years and in a manner accessible to its employees and the public. It must be accompanied by a written statement of accuracy, signed by a director or an "equivalent" in the case of a body corporate. Employers must also upload reports to a website designated by the Secretary of State, along with the name and job title of the person who signed the statement of accuracy. The Equality and Human Rights Commission has said it will regard any failure to provide a report as an unlawful act under the Equality Act 2010.
The Regulations contain no legal obligation to explain the data contained in the gender pay reports. However, given that data evidencing a gender pay gap is likely to garner media interest and potentially impact an employer's reputation, it is advisable to provide some narrative to explain the context in which the gender pay gap arose and how the employer is seeking to remedy it. Any apparent discrepancies may also be explained or given context.
The take-away points are that employers should: (i) review current practice prior to 5 April 2017 in order to understand what gender pay gaps may exist in within their organisation—identifying the rationale for such differentials will be important in order to evaluate any risks and policy going forward; (ii) ensure that all relevant data can be collected through their payroll systems; and (iii) formulate a communications plan before publishing the report to ensure information is presented in a contextualised and comprehensive manner.
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