Gender pay gap reporting obligations in the UK come into force on April 6th this year.
Draft compliance guidelines have been published to help companies comply with their new obligations.
Who must report?
Any ’employer’ who has more than 250 ‘relevant employees’ in any year.
- ‘Relevant’ means employees on April 5th irrespective of the time employed.
- ‘Employees’ may also include self-employed consultants under a “contract to do work personally”.
- ‘Employer’ means the actual employer entity – not the combined headcount of all companies in the same group.
For companies under the 250 employee threshold, there is no obligation to report but employers are nevertheless encouraged to do so voluntarily.
What to report?
Employers must calculate and report:
- Overall gender pay gap for relevant employees, calculated using both mean and median average hourly pay;
- Difference between mean and women’s mean and median bonus pay, calculated over a 12 month period;
- Proportion of male and female employees who received a bonus payment in the same 12 month period; and
- Proportion of male and female employees in each quartile pay band.
The Rules and Guidance provide detailed information on the calculation method. The hourly rate metric is based on a ‘snapshot’ taken on April 5th in each year.
Employers must publish a statement signed by an appropriate senior person confirming the accuracy of the calculations.
Employers can include an explanation for any gender pay gap and its plans for eliminating it.
When to publish
The information from the first snapshot date of April 5, 2017 must be published no later than April 4, 2018 and annually thereafter.
Where to publish
The information must be published on the company website and retained for at least 3 years.
Breach of Rules
Failure to comply is ‘unlawful’ although at this stage no civil penalties have been imposed. The Equality and Human Rights Commission can take enforcement action for an equality related ‘unlawful’ act.
Reputational harm may result from a breach.