Mandatory gender pay gap reporting is now in force for private and voluntary-sector employers, thanks to the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 which came into effect in April 2017.
Now specific figures about an organisation’s gender pay gap (i.e. the difference between the average earnings of men and women, expressed relative to men’s earnings e.g. ‘women earn 15% less than men per hour’) is readily available on the company website. This article explores what this means for organisations.
Does gender pay gap reporting apply to your organisation?
It applies to organisations with 250 or more employees. Note that the 250 figure is a total headcount and employers must count all employees, regardless of how few hours they work. For more info see https://www.gov.uk/guidance/gender-pay-gap-reporting-overview
For those with less than 250 employees, don’t be too complacent it is likely a matter of time before this type of reporting becomes compulsory for most employers.
If it does apply to your organisation, what does it mean?
- It means that by the 4 April 2018 organisations will need to publish their gender pay gap analysis on their website along with a signed statement saying that the information is accurate (and leave these results there for at least three years). Plus, this information will need to be uploaded onto the Government’s reporting website.
- It means that those responsible will need to be familiar with the definitions in the regulations so that the metrics are calculated correctly. For example, ensuring required elements of pay are included when doing the necessary calculations (“ordinary pay” includes basic pay and holiday pay, but excludes overtime pay and pay in lieu of leave).
- It means that organisations need to have strong reporting and analytical capabilities so they can collate this report. Access to the right data and an effective HR system such as SagePeople is integral to this.
- Lastly, it means organisations will need to address the gender pay issue in a meaningful way before this information becomes available in the public domain. They also need to consider the impact from making this information available and how it portrays the organisation to prospective candidates, existing staff, prospective customers and other 3rd parties such as potential investora. A plan of action to address gender pay gaps is eminently sensible to avoid a potential backlash as evidenced recently over the BBC’s gender pay gap.
So, will you be compliant next April? And will you be able to address the challenges of a gender pay gap. If you would like to discuss any of the issues raised in this article please contact us on 01327 317 701 or via our website.