Financial & Legal News

INSIGHT: Gender Pay Gap Reporting to be Mandatory by 2016

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David Cameron has set out his ambitious plan to eliminate the gender pay gap ‘within a generation’, with the introduction of mandatory reporting requirements.

A consultation into the new measures is to begin on Tuesday next week and will see every private sector and voluntary organisation with 250 employees or more required to publish the average earnings of its males and females from 2016.

The precise details of the new reporting requirements are to be discussed during the consultation, including how, when, where and what information will be published, which is due to conclude on 6 September 2015.

The bold move has already been welcomed by many and is deemed a major step forward to achieving better pay transparency, diversity and increased wages for women.

However, the disclosure of an adverse gender pay gap may result in a number of dangerous implications for businesses, including:

  • Negative publicity and reputational damage
  • Impact on staff attraction, retention and procurement processes
  • Financial damage from employee equal pay claims that could date back more than six years

Any companies that fail to comply with the new reporting requirements could face a fine in the region of £5,000.

To ensure a balanced view around the measurement and categorisation of gender pay gap reporting, it is vital that ministers seek input from organisations of various types and sizes. Without considering all the angles and loopholes, a company could publish a headline figure, which on face value, gives a false representation of them as a business.

Various industries and roles are sufficiently more attractive to females than males, and vice versa, as well as most companies hiring staff in accordance to their skills and abilities - regardless of gender. Therefore, requiring a company to produce a more detailed gender pay gap report should prevent the risk of it being neglected by women.

For advice and support on the gender pay gap reforms and how to ensure your business minimises the risk of an equal pay claim, contact Susan Mayall on 0161 684 6948 or email susan.mayall@pearsonlegal.co.uk

Please note that the information and opinions contained in this article are not intended to be comprehensive, nor to provide legal advice. No responsibility for its accuracy or correctness is assumed by Pearson Solicitors and Financial Advisers Ltd or any of its members or employees. Professional legal advice should be obtained before taking, or refraining from taking, any action as a result of this article.

This blog was posted some time ago and its contents may now be out of date. For the latest legal position relating to these issues, get in touch with the author - or make an enquiry now.

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