Despite the Equal Pay Act 46 years ago, shockingly, women still earn on average over 19% less than men in Britain today. (CIPD).
In an attempt to remove this inequality, the Government has now published draft Regulations (the Equality Act (Gender Pay Gap Information) Regulations 2016) which are expected to come into force in October 2016.
The new Regulations will apply to employers in the private and voluntary sector in England, Wales and Scotland with at least 250 employees as at April each year. (Public sector employers are currently excluded.)
These organisations will have to publish five pieces of information annually on their websites, starting from April 2017. Employers will have a year to comply, which means the latest date for their first report to be published is 30th April 2018, based on pay rates as at 30th April 2017.
Organisations will need to publish the following;
1. The mean gender pay gap for the organisation, expressed as a percentage difference between the average hourly pay for men and for women (pay includes basic salary, bonus payments and allowances, but not overtime pay)
2. The median gender pay gap (as above)
3. The difference between the mean bonus payments paid to both men and women over the previous 12 months
4. The proportion of men and women that received a bonus over the previous 12 months
5. The number of men and women in each quartile of the employer’s pay distribution.
The Regulations go some way to ensuring that the gender pay gap remains a hot topic. A recent Business in the Community study (2015) found that 89% of employees said they would form a negative view of their employer if the gender pay gap was fairly large. Conversely, if the gap was reasonably small, 71% of employees would form a positive view.
There are obvious implications therefore with regards to talent management and attraction and retention.
Employers should consider the implications of such reporting, and it would be sensible to prepare some preliminary figures and then consider what, if any, action should be taken prior to publishing their actual data after April 2017. The Regulations will go only some way towards resolving the gender divide issues, more work needs to be done within education, government, employers and families.
If you would like help in how to calculate the required data, or clarification on what this means for your business, please contact a member of our team.
We are running a webinar on this topic to explain what the Regulations require in practice, and what organisations need to do to prepare and provide this information.
If you would like to attend, please sign up below: