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Gender pay gap reporting update : UK and Germany

By - - Equality, Diversity and Equal Rights, Gender equality

Great Britain (i.e. not Northern Ireland)

Gender pay gap reporting now applies to the private sector in Great Britain and to the public sector in England.

Employers with 250 or more employees must report on the difference between the average earnings of men and women in their organisation by showing the mean and median average gender pay and bonus gaps, the proportions of males and females who receive a bonus, and the proportions of males and females when divided into four pay groups (ordered from lowest to highest pay).

Private sector businesses must publish their first pay gap report by 4 April 2018.

The rules contain no real enforcement teeth other than a ‘naming and shaming’ approach with possible harm to your employer brand.

Northern Ireland

The British regulations do not apply in Northern Ireland but it is expected NI rules will be announced soon.

While the Northern Ireland approach should be similar to that under the British regulations, the Northern Ireland administration has said they intend them to be wider and the penalty for non-compliance to be higher, at £5,000 for every employee.

Therefore, for large businesses, the potential cost of a slip up highlights the importance of being ready to comply when the rules come into force.

The implementing regulations look likely to include the following:

  • in addition to reporting information about gender pay differences, employers must include information on employees’ disability and ethnicity per pay band;
  • it is currently expected that gender pay gap information must be split into pay bands;
  • reported pay differences should be eliminated and an action plan setting out how the company will do this ‘must’ be published and given to all staff and the recognised trade union.

Whilst there are still areas to be clarified, it seems clear that Northern Ireland is ready to take a tougher approach to addressing gender pay differences than either Great Britain or Germany.

Germany

Germany’s new Gender Pay Gap rules came to force on July 1st, 2017.

For businesses with more than 200 employees, individuals can ask for information on the criteria and procedures for salary reviews both in relation to their own pay and the pay of a comparable group of employees of the other gender, provided the comparable group has at least 6 members.  The first employee request for such data cannot be made before December 31st,  2017 so employers have more time to prepare.

Failure to comply with this obligation will mean the burden of proof in an equal pay dispute will switch onto the employer.

Businesses with more than 500 employees must, with effect from 2018, provide regular financial reports on the specific efforts they are making to remove inequality between genders.  If no measures have been taken,  the business must explain why.

In addition, businesses with more than 500 employees are encouraged, but not obliged, to carry out internal audits to ensure or prove they are complying with the existing equal pay laws.

 

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