The Equality Act 2010 (Gender Pay Gap Information) - What You Need to Know

The Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 (SI 2017/172) come into force on 6 April 2017. The Regulations require large private and voluntary sector employers (those with 250 employees or more) in England, Scotland and Wales to take a ‘snapshot’ of data on 5 April 2017 and use this data to calculate their mean and median gender pay and bonus gaps.

Employers are required to publish the information gathered on both their own website and a designated government website by no later than 4th April 2018. The report will need to publish the company’s:

  1. Mean gender pay gap in hourly pay;
  2. Median gender pay gap in hourly pay;
  3. Mean bonus gender pay gap;
  4. Median bonus gender pay gap;
  5. Proportion of males and females receiving a bonus payment;
  6. Proportion of males and females in the company’s lower, lower middle, upper middle and upper hourly rate quartile pay bands.

For the purposes of the above calculations, figures are based on ‘ordinary pay’ and ‘bonus pay’. Ordinary pay includes basic pay, allowances, pay for leave but not pay for overtime, redundancy/termination of employment or benefits of kind.  Bonus pay is widely construed and includes any remuneration relating to profit sharing, productivity, performance, incentive or commission.

Although such calculations may seem relatively straightforward, as employers gather their gender pay gap data and try and put the Regulations’ detailed provisions into practice, a number of complications are likely to arise. Such complications are expected to include; employees with variable hours, tracking overtime hours and how to treat the award of shares (which count as bonuses). Unless further clarity is provided on such issues, it is unlikely that all employers will take a consistent approach to their reports and this will reduce the comparability of the data.

In respect of penalties, failure to comply with the Regulations will not lead to an express sanction but will be considered an ‘unlawful act’ falling within the existing enforcement powers of the Equality and Human Rights Commission. Employers should be aware of this and also the potential for adverse publicity for failing to comply.

If you have any questions regarding gender pay gap reporting please contact a member of the Employment Team