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Checklist for employers: gender pay reporting
How should employers go about complying with the equal gender pay reporting obligations due to come into force in April 2017 under the Equality Act 2010?
As we reported last month, the laws requiring larger companies to report on their gender pay gap is expected to come into force on 6th April 2017, subject to the final approval of Parliament.
For employers with 250 or more employees in the private and voluntary sectors, The Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 (the regulations) will require employers to calculate the difference between men's and women's average hourly pay and publish the results on both their own and a government website. Public sector regulations are expected to follow the same timescale.
The government and Acas have now published a draft guide to help employers on “Managing gender pay reporting in the private and public sectors”.
The government hopes the regulations will help employers minimise the gender pay gap. It acknowledges that the “benefits will differ between employers but can include developing a reputation for being a fair and progressive employer, attracting a wider pool of potential recruits for vacancies and the enhanced productivity that can come from a workforce that feels valued and engaged in a culture committed to tackling inequality”.
Checklist - how to comply with equal gender pay obligations
Our checklist gives general guidance for employers to help them understand what is expected of them under the new legislation. If you are in any doubt about whether or how the regulations apply to your business, you should seek legal advice. Any failure to comply will be penalised and could affect the reputation and commercial standing of your organisation.
- Check whether the regulations apply to your company. In essence, an employer must comply with the regulations for any year where they have a ‘headcount’ of 250 or more employees on the "snapshot date" which this year is 5 April 2017.
- Those with fewer employees should give serious consideration to the business benefits of voluntary compliance.
- For gender pay reporting purposes, part-time workers count as one employee and every employee within a job-share counts as one employee each.
- If in any doubt about whether the regulations apply to you, or the definition of “employee”, seek legal advice. Non-compliance will lead to penalties.
- Research and collate the essential information from your employment records including details about pay, bonuses and weekly working hours for all relevant employees.
- Carry out the appropriate calculations to provide a balanced overview. This will entail calculating employees’: mean gender pay gap, median gender pay gap, mean bonus gender pay gap, median bonus gender pay gap, the proportion of males receiving a bonus payment, the proportion of females receiving a bonus payment; and the proportion of males and females in each quartile band.
- Employers should be sensitive to how an employee chooses to self-identify in terms of their gender: the regulations do not define the terms ‘male’ and ‘female’. Do not single out employees and question them about their gender.
- If you have identified a gender pay gap, consider how you will deal with the gap and eliminate it.
- Draft a supporting statement. The regulations will require this statement to be written and signed by an appropriate senior person such as a director. The statement will act as a 'narrative' which explains proposed measures to close any gap.
- The senior person, in signing the written statement, confirms the accuracy of their calculations.
- Employers must then publish the gender pay information collated, the results of the calculations and the written signed statement within one year of the relevant 'snapshot date' on an easily locatable place on the employer's website as well as the designated government website.
Details of the government website will be available closer to the date of the first “snapshot”, which is 5th April 2017.
Employers should implement their plans to manage the gender pay gap. An employer should use the information collated “to help understand any underlying causes for their gender pay gap and take suitable steps to minimise it”. This step is not a legal requirement but advised by Acas and the government to help employers reduce the gender pay gap in their workplace.
- Close the gap!: Gender Pay Regulations and their application to group companies, January 2017
- Government Mandatory Gender Pay Gap Reporting
- Acas Government Equalities Office: Managing gender pay reporting in the private and voluntary sectors, January 2017
To discuss any aspect of the process above or general issues relating to the gender pay gap, contact Susan Mayall on 0161 684 6948 or Kate Hunter on 0161 785 3500 or make an enquiry.
Posted 24 February 2017
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 LLP 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.