Gender Pay Gap Reporting: FAQ

April will see the introduction of the gender pay gap reporting duty, an important new regulation which will see some employers publishing data on the disparity in pay and bonuses between male and female employees We’ve gathered the most frequently asked questions regarding this new duty and you can also read our guide on how to get ready for gender pay gap reporting.

Which employers will be concerned by the gender pay gap reporting duty?

The gender pay gap reporting duty will apply to all employees with 250 employees or more.

The details of this new duty for private businesses’ and voluntary sector employers are set out in the drafted 2010 Equality Act (Gender Pay Gap Information) 2017 Regulations. This draft does not define the notion of “employee” so the definition of the Equality Act 2010 applies. In this case, “employee” includes apprentices and workers with a contract.

The Government has announced that it intends to extend this duty to employers from the public sector with 250 employees or more. Public authorities concerned by this duty are set out in the draft Equality Act 2010 (Specific Duties and Public Authorities) Regulations 2017.

What information is required for publication?

According to the draft regulations mentioned above, employers in the voluntary and private sectors must share the following information:

  • Difference in both average and median pay when comparing men and women
  • Difference in both average and median bonus pay between both men and women employed by the body
  • Proportions of employees who received bonus pay broken down by gender
  • Proportions of men and women in each quarter of pay distribution

All pay information has to be formed on one day – the 5th of April every year – whereas all bonus information has to be collected on the year preceding the report date.

This means the first gender pay gap reporting information must be formed on pay statistics for the 5 April 2017 and bonus pay information on the 12 months preceding the 5th of April 2017.

There is also an equivalent gender pay gap reporting system for public sector employers, as set out in the regulations mentioned previously. The duty is the same as for those in both voluntary and private sectors, but the only difference is that pay information should be based on the 31 March.

Should agency workers or contractors be included in your report?

To answer this question, we need to closely look at the definition of ‘employee’.

The definition of ‘employee’ to consider is the one under s.83 of the Equality Act 2010. This includes all individuals who have a personal contract to do work. This could include some self-employed contractors and agency workers. Any agency worker or contractor who does not have a contract with the employer should not be included in your report calculations.

The regulations provide an exception for employers in relation to individuals employed as such. If the employer cannot access the data needed for the calculations, or if it not practicable to obtain this data, then the individual can be excluded from the calculations. This is likely to cover self-employed workers that are not on the employer’s payroll but are covered by the definition of ‘employee’ used in the regulation.

What changes were made in the revised version of the draft in December 2016?

The main changes in the revised version of the draft regulation, published in December 2016, are the following:

The date on which employers must capture the pay information has been changed from the 30th of April to 5th of April. This means the first gender pay gap reporting analysis has to be published before or on the 4th of April 2018 at the latest.

The difference in median bonus pay has been added to the duty in addition to the difference in the mean bonus pay.

An explanatory note has been added to state the relevant definition of ‘employment’ to be used regarding this regulation, which is the definition under s.83 of the Equality Act 2010.

It has been added that partners in a firm should not be included in calculations.

The revised version specifies that employees on family-related leave, sick leave or any special leave should only be included in the calculations if they are receiving full pay. For bonus pay calculations, even employees on reduced pay leave should be included.

The revised draft clarifies that each pay quartile should comprise an equal number of employees.

An explanatory note has been added to state that failure to comply with the gender pay gap reporting duty constitutes an unlawful act. This empowers the Equality and Human Rights Commission to take action against the employer if necessary.

Still have unanswered questions or want to know how we could support your business to prepare for the gender pay gap reporting duty? Just drop us a line!

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