Businesses who employ 250 or more employees need to start preparing themselves for the implications of the Equality Act (Gender Pay Gap Information) Regulations (Regulations) 2016. Although the Regulations are still in draft form and not expected to come into force until 1st October 2016, Newark employment solicitor Janine Lawton is urging large private and voluntary sector employers to take action now to fully understand their obligations.

What are the Equality Act (Gender Pay Gap Information) Regulations (Regulations) 2016?

Says Janine:

“The Regulations will require businesses with 250 or more employees to publish their mean and median gender pay gap details, highlighting the difference in gross pay and bonus payments made to female, as compared with male, employees.”

What is defined as ‘pay’ by the Regulations?

For these calculations, ‘pay’ will include payments made to all employees for: basic pay, shift premium pay, bonus pay and other allowances (such as: maternity pay, sick pay and car allowances). However, ‘pay’ will not include: overtime pay, expenses, the value of salary sacrifice schemes, benefits in kind, redundancy pay, arrears of pay and tax credits.

What gender pay gap information needs to be published?

Janine says: “Employers will be required to publish details annually on various categories of pay data.”
  1. Difference in mean pay
This is the difference between the average hourly earnings of the employer’s female employees (taken as a single group) and the average hourly earnings of its male employees (again taken as a single group).
  1. Difference in median pay
This is the difference between the mid-point value of hourly earnings of the employer’s female employees (taken as a single group) and the mid-point value of hourly earnings of its male employees (again taken as a single group).
  1. Difference in mean bonuses
This is the difference in average bonus pay paid to men and women during the 12 month period preceding 30 April 2017(i.e. those paid from 30 April 2016 to 29 April 2017) and for the same period each year thereafter.
  1. Proportion of men and women who receive bonuses
This will show the proportion of male and female employees who received bonus pay, again during the 12 months prior to 30 April 2017, and on the anniversary of those dates thereafter.
  1. Gender pay split between quartile pay bands
The final piece of information to be published is the number of male and female employees employed in four different pay bands.

Where should the gender pay gap information be published?

Provided the Regulations come into force in October 2016, there are two key dates employers need to keep in mind. The first date is 30 April 2017, when employers will need to be prepared to produce a preliminary snapshot showing the relevant data. Then on 29 April 2018, employers must publish the first set of gender pay gap information on a searchable UK website (this will be accessible to both employees and the public). The information must remain on the website for at least three years. In addition, the details must be uploaded to a Government sponsored website which will be used to monitor compliance and employers will be required to publish their statistics every 12 months thereafter. Janine comments:

“Although April 2018 might seem some time away, the published information must include pay details in the pay period that includes 30 April 2017 and details relating to bonuses paid between 1 May 2016 and 30 April 2017.

“Therefore, any bonuses paid by employers in the coming months will have to be taken into account in the first set of published figures.

“At Tallents, we’re encouraging all large employers to be proactive and review current pay practices across their business now, to help them identify where current gender pay gaps occur and devise a strategy for closing any such gaps.”