In February 2016, the government published the draft Regulations which will introduce mandatory gender pay gap reporting to non-public sector employers with at least 250 employees.
The data from the Office for National Statistics (the “ONS”) for the period April to June 2015 showed that the gender pay gap was 9.4% for full-time employees. The gap for all employees was 19.2%. Whilst this gender pay gap was, in fact, the lowest since records began in 1997, the government has sought ways to close the gender pay gap.
A short consultation on the draft Regulations will now take place and the final Regulations will come into effect in October 2016.
What information will employers need to publish?
As the draft regulations stand, employers will need to publish the following information:
The mean and median differences in pay between their male and female employees. The median (which is used by the ONS) is thought to be the best representation of the difference.
The number of men and women in each of four salary quartiles, based on the employer's overall pay range. This should show the gender pay gap for different levels of seniority within the business.
Employers must also publish the difference between the mean bonus payments paid to men and women along with the proportion of male and female employees who receive bonuses.
Where will the information need to be published?
Employers will need to publish the information on their own website and it must be accessible to both employees and the general public.
The information will also need to be published on a website which will be designated by the Secretary of State. It is anticipated that the government will then prepare sector-based league tables, showing the gender pay gap.
When do I need to start publishing the information?
It is expected that the new Regulations will come into force on 1 October 2016.
The Regulations require employers to calculate gender pay gaps using data from a specific pay period every April from 2017 onwards. Employers will therefore be required to prepare a snapshot of gender pay gap data for 30 April 2017. They then have a period of up to 12 months to analyse and publish their first gender pay report (i.e. by 30 April 2018).
Whilst this will give employers 18 months to prepare for the first report, after this employers must produce and publish a report each year.
It is anticipated that many employers will want to publish some narrative together with the figures themselves, to explain any pay gaps and set out what action it plans to take to reduce it.
Is there any enforcement action for non-compliance?
Currently, the Regulations do not include any specific penalties for non-compliance. However, the government has indicated it will keep the situation under review and may well revisit this after the first few years of implementation.
There is a potential risk of being "named and shamed", although again, the government has not firmly committed to this, and it is not contained in the draft Regulations at present.
Steps that employers should take now
Whilst there is some time until information will need to be published, employers should consider gathering gender pay gap information as soon as possible, and analysing it to identify if there is a significant gender pay gap, and if so, why. Employers can then take steps to try and narrow the gender pay gap in advance of mandatory gender pay gap reporting.
For further information, please contact a member of the Employment Team.