Gender Pay Gap Information: does it apply to you?
The final draft of the Equality Act (Gender Pay Gap Information) Regulations 2017 has been published. Subject to parliamentary approval, it will take effect on 6th April 2017. It will require private sector employers (including charities) with 250 or more employees to publish certain information regarding the pay gap between men and women employed in the business.
What kind of business is covered?
The regulations will apply to all relevant employers: an employer, whether a private business or in the voluntary sector, which has 250 or more employees at 5th April in each year (‘the snapshot date’).
Who is counted?
Anyone who is employed at the snapshot date or who is a self-employed contractor or worker under a contract to personally do work. It is likely also to include overseas workers. Partners and LLPs are not included.
Pay reporting obligation
Employers will have a duty to report:
- Median and mean gender pay gap figures for pay, based on the hourly rate of pay during the relevant pay period;
- Median and mean gender pay gap figures for bonuses paid in the year ending with the snapshot date;
- The percentage or men and the percentage of women who received a bonus;
- The number of men and the number of women in each pay quartile (essentially four pay bands).
The figures need to be accompanied by a statement of accuracy signed by a director or equivalent and from April 2018, it will need to be published on your website for at least three years in a place that is easily accessible.
The relevant pay period is the pay period that the snapshot date falls in, for example, if you pay monthly, the relevant pay period is April.
Although counting towards the 250, the information relating to the pay of employees who are on sick leave, family leave or any other type of leave, such as a sabbatical where they are earning less than their full pay is not included in the pay information.
What do the regulations mean by pay and bonus pay?
- Basic pay
- Pay for piecework
- Pay for leave
- Shift premium pay
Bonus pay means:
Any remuneration that is in the form of money, vouchers, securities, securities options, or interests in securities, and relates to profit sharing, productivity, performance, incentive or commission. It does not include overtime, redundancy payments or payments on termination of employment. The bonus pay reporting period is the 12 month period ending on the snapshot date.
For reporting the gender pay gap figures for pay, based on the hourly rate of pay during the relevant pay period, the hourly rate of pay, includes both pay and a pro rata amount for the bonus pay.
There are no specific enforcement provisions for the regulations. However, a failure to comply with the regulations will constitute an ‘unlawful act’ within the meaning of the Equality Act 2006, which empowers the Equality and Human Rights Commission (EHRC) to take enforcement action. We understand that the EHRC have stated that they will need further powers and resources in order to do so.
The information must also be provided to the Secretary of State and league tables for specific industries might be created. This could, according to the government, lead to naming and shaming.
If you are unsure whether you have 250 or more employees, workers or freelancers, it is time to carry out a count. If you are unsure whether specific freelancers are included, take advice. If the count is critical, you may also want to consider whether it may be time to ensure that your consultants are hired through a limited company, as this is going to take them out of the count. If you are at 250 or over, it is now time to consider how best to structure your pay gap report and to create a place, easily accessible, where you can publish it on your website.
For more specific information or to discuss your requirements please call either Amanda Galashan or Julie Calleux at EmployEase on 0333 939 8741, or email us at firstname.lastname@example.org. This note does not constitute legal advice on any particular situation you may have.
©: EmployEase 2016