Gender Pay Gap Reporting Obligations – how does this affect your organisation?

On the 6 April 2017 these new regulations will become law which require both public and private employers with 250 or more employees to publish the following:

  • Overall gender pay gap figures for relevant “employees” (which can include contractors and workers in specific circumstances) using both the mean and median average hourly pay.
  • The proportion of men and women in each of four pay bands based on the employer’s overall pay range.  This will demonstrate how the gender pay gap differs across the organisation, at different levels of seniority.
  • Information showing the difference between men and women’s mean and median bonus pay over a 12 month period
  • The proportion of male and female employees who received a bonus in the same 12 month period.

The Regulations have been brought into force as a means of tackling the gender pay gap in the England.  In 2016 the gap was 9.4% for full time employees and the gap for all employees was 18.1%. 

This data will be subject to any narrative that the employer may want to provide to explain any disparity.  Employers will then have to provide this information annually every April in relation to pay during the previous year. The report must be published on their own website and it must be kept online and publicly available for three years. It must also be uploaded to a government website so that the government can track the number of compliant employers.

There is a suggestion that these regulations lack ‘teeth’ in that they do not contain any enforcement provisions or sanctions for non-compliance. However the Equality and Human Rights Commission (“EHRC”) do have existing powers to enforce this.  Whether this would happen in practice is questionable, especially given the EHRC’s stated aim is to “help organisations achieve what they should, not catch them out if they fall short.” The government has stated that it will run checks to assess for non-compliance and publish tables, by sector (not by name), of employers’ reported gender pay gaps.

Whether this reporting obligation will make any difference to closing the gender pay gap remains to be seen.  We consider that a more pertinent issue for employers may be the impact on any increase in the number of equal pay claims. Organisations would be wise to use this opportunity to consider whether there is any gender disparity in the workplace and if so, how to rectify it.  If a female employee is engaged on ‘like work’ or ‘work rated as equivalent’ or ‘work of equal value’ to that of a male comparator, then she could raise an equal pay claim. We have seen a number of ‘class actions’ brought over the past decade and it is likely that claimant firms will have their eye on these figures when published.

Please get in touch with our Employment Team should you require any further information on this.