The gender pay gap reporting legislation will require employers with 250 or more employees to publish information about the gender pay gap in their organisation every year.
The legislation is subject to parliamentary approval and is expected to come into force this April, from which point employers will have up to 12 months to publish the required information. The regulations apply to the private and voluntary sectors, but the government is aiming to include the public sector by April 2017 too.
If an employer has fewer than 250 employees on 5 April they are not required to comply with the regulations, but should give serious consideration to the business benefits of doing so.
Under the regulations a wider definition of who counts as an employee is used. The definition is taken from the Equality Act 2010 and includes:
- Employees (those with a contract of employment)
- Workers and agency workers (those with a contract to do work or provide services); and
- Some self-employed people (where they have to personally perform the work).
In terms of what an employer will be required to calculate and publish, this includes the following information:
- The difference in the mean and median pay of male and female employees
- The difference in mean and median bonus pay of male and female employees
- The proportions of male and female employees who were paid a bonus in the previous year; and
- The numbers of male and female employees employed in quartile pay bands.
Employers must publish their gender pay gap information on their own website and must keep the information online for three years. Data must be presented in a way that is accessible to all employees and the public.
A written statement confirming that the gender pay gap information is accurate must accompany the statistics and must be signed by an appropriate person, such as a director. Employers also have to upload the information to a government website (including the name and job title of the person who signed the accompanying statement). Details of which government website are yet to be released.
Employers will have the option to explain any pay gaps or other disparities, and set out what action (if any) they plan to take to address them. The provision of a narrative will be strongly encouraged, but it will not be mandatory.
ACAS has published a number of guides and fact sheets in relation to the gender pay reporting requirements, which may prove useful for employers in helping get to grips with this new legislation.
Caroline Acton is solicitor at ESP Law, which provides HR magazine’s HR Legal Service