A new duty requiring big employers to publish data on their gender pay gaps now looks set to come into effect in April 2017 after revised draft Regulations were published today.
The Equality Act 2010 (Gender Pay Gap Information) Regulations 2017, which are still in draft, apply to private- and voluntary-sector organisations with 250 or more employees. Subject to parliamentary approval, the Regulations are due to come into force on 6 April 2017.
Broadly similar rules for the public sector are still to be set out in parallel legislation.
We outline the key points employers need to know about the Regulations.
Which organisations are covered by the Regulations?
Regulations for the private and voluntary sectors cover any employer with 250 or more “relevant” employees in England, Wales and Scotland (but not Northern Ireland) on 5 April 2017 – and on the same date each year after that.
In companies with a group structure, each legal entity will need to report its data. There is no legal requirement on smaller employers to report data, but they will be encouraged to do so.
Who is a “relevant” employee?
The Regulations draw on the same definition of employee as the Equality Act 2010. This is a broad definition which includes zero hours workers and apprentices. One exception to this general approach is that partners in limited liability partnerships who are covered by the Act are not included. Agency workers are also excluded as it is expected that they would be included in any reporting by the agency with which they have a contract of employment.
Employees are covered by the Regulations if they are employed on 5 April, work mainly in England, Wales or Scotland, and are on full pay. Employees on reduced rates of pay while on maternity leave or sick leave are excluded.
What figures need to be reported?
Employers are required to publish six metrics:
- mean average gender gap;
- median gender pay gap;
- mean gender bonus gap;
- median gender bonus gap;
- proportion of men and women getting a bonus; and
- proportion of men and women in each of four pay quartiles.
Calculations for the pay gap metrics are to be based on a single pay period around the “snapshot date” of 5 April, while bonus gap metrics cover the whole year to April 2017. Definitions of what is meant by “pay” and “bonus” in this context are set out in the Regulations, as are detailed instructions on how the figures should be calculated.
This is to ensure that reporting is consistent between organisations and provides meaningful comparisons.
What format should the report take?
The report must be published in English, by April 2018, on a company website that is accessible to employees and the public.
There must be a written statement signed by a director vouching that the report is accurate, and it must remain on the website for three years. There is no legal requirement to publish commentary explaining the figures, but this is strongly encouraged. There is a requirement that the report should also be uploaded to a government website, but no details of this have yet been released and work is still believed to be under way to build the website.
What help is there for employers?
Acas is expected to publish guidance which expands on the core Regulations in due course.
XpertHR also has a range of guidance and information, including: