Gender pay reporting regulations: What you need to know

The revised draft Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 are intended to come into force on 6 April 2017. They are still subject to Parliamentary approval.

Under the regulations, employers employing 250 or more ‘employees’ are required to publish information about the gender pay gap in their organisation.

One of the key changes is to the regulations’ definition of ‘employee’; it was previously unclear, but has been clarified to mirror the definition in the Equality Act 2010. This means the regulations cover many self-employed workers who are engaged directly by employers as consultants, independent contractors, zero hour’s workers, apprentices and agency workers if they have a contract of employment, or a contract personally to do work.  

As a result, many more employers are likely to come within scope as these ‘employees’ will now count towards the 250-employee threshold.

The regulations state that self-employed workers are exempt where it is not reasonably practicable to obtain this data. Employers are not required to include data relating to an employee who is employed under a contract personally to do work if the employer does not have the data and it is not reasonably practicable to obtain it.  What amounts to ‘reasonably practicable’ remains to be seen.

The requirement is to publish data captured at a snapshot date. The date has changed from 30 April 2017 to 5 April 2017. Whilst the snapshot must relate to pay at the end of April each year (starting 2017), the information ‘only’ needs to be published within 12 months of that date.  That means that the last possible date for publishing information will be April 2018, leaving a reasonably long lead-in period for companies to consider what to say, and how to say it.

Pay information to be reported is gross pay calculated before deductions at source. The definition of pay has been tweaked in the new regulations and includes:

• basic pay;

• paid leave;

• allowances;

• shift premium pay; and

• pay for piecework.

Pay does not include:
• overtime;

• expenses;

• benefits in kind;

• redundancy pay; or

• other termination pay or payment in lieu of leave.

Bonus pay is included but has a separate definition in the new regulations. Commission is treated as bonus pay.

The basic obligations remain the same. Employers will need to publish:

• The difference in the mean and median pay of male and female employees;

• The difference in mean and median bonus pay of male and female employees;

• The proportions of male and female employees who were paid a bonus in the previous year; and

• The numbers of male and female employees employed in quartile pay bands.

The information must be published on the company’s website in a manner which is accessible to its employees and the public, for a period of at least 3 years.  This information must be accompanied by a statement signed by a director (or similar for non-companies) which confirms that the information is accurate.

What does this mean for you or your business?

Employers will need to be aware of which individual will be caught by the regulations, and then work out how the information will be calculated and then published. This is no easy task so get thinking now.

Whilst the regulations do not expressly contain any sanctions for failure to comply with them, the explanatory notes state that a failure to comply with an obligation imposed by the regulations will constitute an ‘unlawful act’ within the meaning of section 34 Equality Act 2006.  This means that the Equality and Human Rights Commission could take enforcement action.

What do you need to be doing now?

If your organisation meets the 250+ ‘employee’ threshold, start making plans now as to how you will capture the required information on gender pay reporting.  No doubt there will be products readily available to offer a helping hand.

These notes have been prepared for the purpose of an article only. They should not be regarded as a substitute for taking legal advice.