Gender pay gap reporting is coming in October – what do you need to know?

by Alexander Beard, on Aug 8, 2016 9:34:02 AM

New regulations on gender pay gap reporting are set to come into effect at the start of October 2016. Whilst this can only be a good thing to reduce the discrepancy between the pay received by men and women in the UK (the current pay gap is 19.2%), it also means additional expectations of affected employers to publish the numbers on their gender pay gap.

Relevant businesses will need to be ready to disclose their statistical information in April 2018. However, a recent survey found that four in ten of those who would be affected by the new regulations didn’t know what would be required of them. If you count yourself among that number, or even if you feel you know some but not all of the facts, have a look at the answers to some of the key questions around the gender pay gap legislation below.

  • What do we know so far? – The new regulations will affect both the private and voluntary sectors in England, Scotland and Wales. Data will begin to be collected from April 2017 from companies employing 250 or more relevant people. ‘Relevant’ in this context means an employee who works in Great Britain, ordinarily under a contract governed by UK legislation.
  • What data will need to be published? – The four areas from which data will be required are: the mean and median of the overall gender pay gap; the mean gender bonus gap for those being paid bonuses; the percentages of both male and female employees receiving bonuses; the amount of men and women being paid at different quartiles.
  • How is pay defined? – The definition of ‘pay’ offered by the Office of National Statistics will be: ‘basic pay, paid leave, maternity pay, sick pay, area allowances, shift premium pay, bonus pay and other pay (including car allowances paid through the payroll, on call and standby allowances, clothing, first aider or fire warden allowances). It does not include overtime pay, expenses, the value of salary sacrifice schemes, benefits in kind, redundancy pay, arrears of pay and tax credits’. This definition appears to exclude some key areas including statutory paternity pay, statutory adoption pay and overtime pay, but these may be clarified further in the near future.
  • How will the data need to be calculated? – An hourly pay rate will need to be calculated, although depending on whether employers use contractual hours or actual hours worked this could result in distorted calculations and flawed comparisons. To ensure this doesn’t happen, the government will need to provide both clear guidance and sufficient examples of scenarios that could come up.