29 June 2017
It has long been recognised that there is a gap between the average pay for women and men and measures are now in place to attempt to bring this gap to a close with the publishing of new regulations, which came into force on 6 April 2017.
Since 1997, the Office for National Statistics (ONS) has been measuring this gender pay gap on a national level as part of its Annual Survey of Hours and Earnings. In 2015, the survey showed that the gap for full-time employees was the lowest it had been since records began with women being paid 9.4% less, however, the gap between all employees was 19.2%.
The new regulations require employers (in both the private and voluntary sectors) with more than 250 employees to take a snapshot of data about their employees’ pay on 5 April each year, and to publish their gender pay gap statistics on their website – starting with 5 April 2017. An ‘employee’ for this purpose is defined in the Equality Act 2010 and covers many self-employed workers who are engaged directly by employers as consultants and independent contractors, etc. This means that many more employers are likely to fall within the scope of the regulations as these workers will bring the employee count above the 250 threshold. However, only employees on full-pay at 5 April each year will be included in the statistics to avoid those on a lower rate of pay at that time, eg. someone on parental leave, skewing the data.
It is important to note that gender pay reporting is different to equal pay. Equal pay deals with the pay differences between men and women who carry out the same jobs, similar jobs or work of equal value and it is unlawful to pay people unequally because of their gender. The gender pay gap shows the difference in the average pay between all men and women in a workforce and therefore doesn’t account for the proportion of men and women in different occupations.
As the first snapshot date was 5 April 2017, you have until 4 April 2018 before you must publish your first gender pay gap information on your website. The legislation requires the information to be published in a prominent place on company’s website so that it’s accessible to both employers and members of the public. Interestingly, there is no requirement to explain the numbers, although some employers may choose to do so to help clarify the disclosures. A ‘month’ and a ‘year’ are treated as having a specific number of days and there is a specific calculation to be used. Particular statistics are required, including pay gap quartiles, the average and the median, and there are also some exceptions where data may be difficult to include.
Whilst those affected by the changes have until next April to comply it would be advisable to act now to ensure that the necessary information and statistics can be extracted from the payroll data. There are currently no penalties in place for non-compliance but this may change, and failure to comply will carry the risk of harming your reputation.
In order to prepare for this new regime, we recommend you:
- identify whether you are a relevant employer and which employees, if any, would be concerned, checking their employment status under the Regulations;
- identify any areas of uncertainty over who is in the scope;
- consider whether you have overseas employees assigned to work in the UK;
- analyse which elements of your remuneration package are reportable.
We’ve also produced a publication which provides helpful information and our recommendations of how to prepare in advance on the deadline. Click here to view it.
We are currently working closely with our payroll clients caught by these new rules to ensure they are able to meet the requirements. If you would like any help in preparing for these regulations and ensuring you are compliant, please contact your local UHY payroll expert.