Gender pay gap reporting

The regulations requiring big employers to publish data on their gender pay gaps came into effect on 6th  April 2017.

The Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 apply to private and voluntary-sector organisations with 250 or more employees.

The Equality Act 2010 (Specific Duties and Public Authorities) Regulations 2017 apply to public bodies with 250 or more employees.

Which employers are affected by the Regulations?

The private and voluntary sectors

The regulations cover any employer with 250 or more “relevant” employees in England, Wales and Scotland (but not Northern Ireland) on 5 April 2017 – and on the same date each year after that.

In companies with a group structure, each legal entity will need to report its data. There is no legal requirement on smaller employers to report data, but they are encouraged to do so.

The public sector

The requirements for the public sector largely mirror those for the private sector but the public-sector requirements have been introduced as part of the existing public-sector equality duty, rather than as a stand-alone requirement, and the annual “snapshot” date on which the pay information is collected is 31st March for public sector employers, as compared to 5th  April for private and voluntary sector employers.

Any authorities not listed as public bodies will be covered by the private and voluntary sector gender pay reporting regulations, as will private and international schools.

While the aim is to make the reporting requirements consistent across the public and private sectors, the public sector already has specific duties on equality, which the regulations have to reflect.  There are also differences between the public sector equality duties in Wales and Scotland as compared to England, and it remains to be seen how these differences will work out in practice.

Scotland has already said it will require all public authorities with more than 20 employees to publish their pay gap every two years and an equal pay statement every four years.

Public, private and voluntary sectors

Between them the two sets of regulations cover private, voluntary and public sector organisations across Britain. While there are slight differences in the regulatory framework for the public and private sectors, the measures of the gender pay gap are the same for all three sectors.

Employers whose headcount varies will have to report in any year in which the headcount is 250 or more.

How is an employee defined?

The regulations apply the same definition of employee as the Equality Act 2010. This is a broad definition which includes zero hours’ workers, apprentices and some self-employed people.

Agency workers will be included in any reporting by the agency with which they have a contract of employment.

Employees will be covered by the regulations if they are employed on the relevant snapshot date, work mainly in England, Wales or Scotland, and are on full pay. Employees on reduced rates of pay while on maternity leave or sick leave are excluded.

How is pay defined?

Ordinary pay’ means basic pay; allowances; pay for piecework; pay for leave; and shift premium pay. It does not include overtime pay; redundancy pay; pay in lieu of leave, or non-monetary remuneration.

‘Bonus pay’ means pay in the form of money, vouchers, securities, securities options, or interests in securities; and pay that relates to profit sharing, productivity, performance, incentive or commission. Non-consolidated bonuses are also included.

What data must be published?

Employers are required to publish six metrics:

  • The difference between the mean hourly rate of pay of male full-pay relevant employees and that of female full-pay relevant employees ( ‘the mean gender pay gap’);
  • The difference between the median the mean hourly rate of pay of male full-pay relevant employees and that of female full-pay relevant employees (‘the median gender pay gap’);
  • The difference between the mean bonus pay paid to male relevant employees and that of female relevant employees (‘the mean gender bonus gap’);
  • The difference between the median bonus pay paid to male relevant employees and that of female relevant employees (‘the median gender bonus gap’)
  • The proportions of male and female relevant employees paid bonus pay (‘the proportions of men and women getting a bonus’); and
  • The proportions of male and female relevant employees in the lower, lower middle, upper middle and upper quartile pay band (‘the proportion of men and women in each of four pay quartiles’).

Calculations for the pay gap metrics are to be based on a single pay period around the “snapshot date” of 5 April (private and voluntary sectors) or 31st March (public sector), while bonus gap metrics cover the whole year up to the relevant date. The Regulations provide detailed instructions on how the figures should be calculated.

What format should the report take?

The data required from employers must be published in English, by April 2018. Employers must publish their gender pay gap report on:

  • The gender pay gap reporting website. You can access the site here.
  • A company website that is accessible both to employees and to the public.

The information must remain on these websites for three years.

A second site, the Gender Pay Gap Viewing Service is open to the public. The site is well-laid out and easy to read, and the headline figures are backed up by access to a spreadsheet which, over time, will be populated with data from all participating employers.

The Gender Pay Gap Viewing Service can be found here

There is no requirement to publish any accompanying narrative or commentary, but many organisations will wish to explain what the figures mean. The ACAS/GEO guidance – see below – encourages employers to add a supporting narrative, as does the CIPD.

The report must remain on the website for three years, but can be left up for longer if the employer so chooses.

Who has to sign off the report?

The report must be accompanied by a written statement signed by a director, or other responsible person, vouching that the report is accurate. The ACAS/GEO guidance lists the appropriate signatories.

What are the sanctions for non-compliance?

There are no penalties as such, but this will be reviewed if levels of compliance are not satisfactory. However, non-compliance would amount to an unlawful act falling within the existing enforcement powers of the Equality and Human Rights Commission. The Commission’s powers of enforcement are set out in the Equality Act 2006. You can find the Act here.

Guidance on gender pay gap reporting

ACAS/Government Equalities Office

The Government Equalities office and Acas have produced joint guidance on gender pay gap reporting. You can find the guidance here.

There is a separate mini guide on the public sector, which you can find here.

You can also find a factsheet on obligations for employers here and one on the top ten myths here.

Acas have also produced a gender pay reporting notification template. NB. this is not a template for reporting your metrics, but one for letting your employees know what you are doing.  You can find the template here.

CIPD

The most comprehensive guidance is that published by the CIPD. You can find the guide here.

You can also listen to a podcast on gender pay gap reporting here.

Government Equalities Office

You may also find it useful to read the Government’s response to the second round of consultation on the regulations here. This is helpful in explaining why the regulations are as they are.

Will there be guidance for employees?

There will be no guidance as such for employees, but employees are encouraged to look at their employer’s gender pay gap figures.

The Government also provides an online tool that allows the public to find out the gender pay gap for their occupation as defined in the standard industrial classifications used by the Office for National Statistics. For more on this go to Tools.  

Similar initiatives across Europe

The law firm Eversheds has looked at similar initiatives across the European union and has produced a briefing on their findings.  You can read this briefing here.

 

Last updated 15th November 2017