The average pay gap between male and female employees reportedly stands at about 20%. It is perhaps unsurprising that the government has today re-stated that closing this gap remains a priority, and it has published draft regulations requiring certain employers to publish data on gender pay gaps.
We have known for a while that the government was intending to introduce regulations on mandatory gender pay gap reporting. However, this is the first time that the detail of the proposed regulations have been made public.
The main points you need to be aware of are:
• The regulations will apply to private and voluntary sector employers in England, Wales and Scotland with at least 250 employees.
• Employers will be required to publish the overall mean and median gender pay gaps. They must also divide their overall pay range into quartiles, and publish the number of men and women in each quartile.
• For the purposes of the regulations, “pay” will include basic pay, paid leave, maternity pay, sick pay, area allowances, shift premium pay and bonus pay, as well as some other allowances/enhancements. The definition excludes overtime, expenses, the value of any salary sacrifice schemes, benefits in kind, arrears of pay and tax credits.
• Employers will be required to publish specific data about bonuses. They must report the difference between the mean bonus payments made to male and female employees, as well as the proportions of male and female employees who receive a bonus.
• The regulations will require employers to publish the data on their public website, as well as uploading it to a government sponsored website. Employers will have to keep the data online for three years.
The government has set a provisional date for the implementation of the draft regulations; it’s envisaged that they will come into force on 1 October 2016. Employers will have some time to adjust once the regulations take effect; they will have about 18 months to put any new systems in place for collating and analysing the data before they have to publish it.
The government will build a database of employers who do and do not comply with the regulations. For now the government hopes that this approach of ‘naming and shaming’ those who don’t comply with the regulations will be sufficiently effective, and it doesn’t intend to create any specific penalties for non-compliance. However, it hasn’t ruled out introducing penalties in the future.
At present the regulations are in draft form and the government is taking feedback on them until 11 March 2016. If you would like to review the regulations and give your feedback, you can do so here: .https://consult.education.gov.uk/government-equalities-office/mandatory-gender-pay-gap-reporting-draft-regulatio/consult_view
Supporting guidance for employers on the final version of the regulations will be published later this year and we will update you once we know more. In the meantime, if you have any questions pleas do not hesitate to contact the employment team, tweet us or call our employment partner, Sarah Tahamtani on 0113 336 3314.