Smith Partnership Solicitors, celebrating its 30th anniversary this year is advising companies to be proactive as the new regulations on the Gender Pay Gap Reporting comes into force.
New regulations came into force today (6 April 2017) meaning that thousands of companies will have to declare their gender pay gaps. The Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 (“the Regulations”) applies to the private and voluntary sector companies which have more than 250 employees. Similar gender pay gap reporting is already in force for public sector Companies, this came into force 31 March 2017.
The Chartered Management Institute (CMI) calls it "unprecedented transparency" and it will mean that companies will have to report how they pay men and women, which could of course have a substantial effect on Employers who have a large pay gap.
The “snapshot” date is now 5 April each year and the report is to be published within 12 months. This will mean that the first “snapshot” of information will be taken on 5 April 2017 for the prior 12 months and the first reports published by 4 April 2018.
When reporting, your company must provide the following information:
The difference between the mean and median hourly pay for men and women;
The difference between mean and median bonus payments paid to men and women over a 12 month period;
The number of men and women paid bonuses;
The number of men and women in each quartile of the pay distribution.
“Pay” is defined broadly and includes basic pay, annual leave, maternity pay, sick pay, shift premium and most allowances (car allowances for example). However, it doesn’t include overtime, redundancy pay, benefits in kind and payments to do with termination of employment.
This gender pay information must be reported in a pre-set format and needs to be published on the Company’s website and a Government website and must stay on for a minimum of three years. It is recommended that the Company provides a narrative alongside the actual data, as it gives the Company an opportunity to give reasons for their gender pay gap and explain any measures they have taken since to rectify the gap.
It is recommended that you ensure you have systems in place to gather that information and to proactively identify any pay gaps that may emerge and seek to address those in advance of publication, so this can be included in the narrative.
Failure to comply is an “unlawful act” although there is still no specific penalties (either civil or criminal) set out in the Regulations.
Acas Guidance provides a useful aid for Companies to ensure that they are following correct procedures for Regulations - “Managing gender pay reporting in the private and voluntary sectors” http://www.acas.org.uk/index.aspx?articleid=5768
Hannah Read, Paralegal, in the Employment Department says “It won’t be until this time next year when the first set of information is released, but companies need to be proactive now to ensure that they have the information from 5 April 2017, to be able to release this information in line with the new regulations on 4 April 2018.”
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