Michelle Dixon on Gender Pay Gap

Gender Pay Gap Reporting

| Published on April 20, 2016

The national gender pay gap remains at 19.2%, this means that women are earning 80p for every £1 earned by men.

By April 2018 all employers (private and voluntary sector) with 250+ employees (contracted in Great Britain) will be required to annually report gender pay gap information.

Before then, by 30 April 2017, all applicable employers will be required to prepare a preliminary data snapshot showing any gender pay gap.

Therefore, whilst the legislation is still in its infant stage, employers should start an investigative process now in order to discover and address any gender pay gap issues before the reporting requirement comes in.

The intention of this legislation, the draft Equality Act 2010 (Gender Pay Gap Information) Regulations 2016 which is scheduled to come in force in October, is to eliminate pay discrimination and highlight any patterns which indicate employers are impeding employee career progression on grounds of gender.

The draft regulations require employers to calculate and publish:

  • The overall mean and median gender pay gap across the workforce (using an hourly rate);
  • Where relevant, the difference between mean bonus payments made to men and women;
  • The number of men and women in each quartile of the employer’s pay distribution.

“Pay” means basic pay, paid leave, maternity leave, sick pay, and allowances such as car allowance, shift premium pay and bonuses (which include cash payments, long-term incentive plans and the monetary value of any shares on the date of payment).  However, overtime, salary sacrifice schemes, redundancy pay and benefits in kind will not be included.

Employers will have to sign a statement confirming the accuracy of the data and send it to a government sponsored website as well as publishing it on their own website, which will be accessible to employees and the public and remain available for three years.

Employers can publish a narrative to accompany the pay gap information to explain the context of the pay gap, contributing factors and any initiatives the employer is taking to resolve the pay discrimination.

Discrepancies may result in the affected employee(s) making a claim or their trade unions taking action.  Where an employer loses a gender pay claim it will also be subject to a compulsory equal pay audit.

Employers should consider taking action now: carry out an equal pay audit, review their systems to ensure it can calculate the required information, especially those with complex pay structures, and address any discrepancies.

Michelle Dixon, Associate Solicitor

For further advice, please contact a member of our Commercial and Employment Team at our Poole Office on 01202 725400 or Dorchester Office on 01305 251007.

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