New legislation on gender pay gap reporting came into force on 31 March for the public sector. The overall aim is to address the imbalance in pay between men and women in the workplace.
The legislation requires organisations with 250 or more employees to publish online any gender pay or bonus gaps for men and women, the proportion of men and women who receive bonuses and quartile statistics for all employees in the organisation.
Employers need to publish their gender pay gap results within one year of their snapshot date (31 March for the public sector). Failure to do so will be unlawful so employers need to take steps now in order to become compliant.
The regulations are fairly complex, more so if your organisation is part of a group of companies/bodies/authorities or co-joined organisational groups; has a number of different types of workers (employees, casual workers, contractors) and/or has a complex payroll with numerous pay elements.
Once employers have decided on the number of reports they need to run they must ensure they include all the right people within them. This is not as straight forward as it sounds as the regulations ask employers to use the Equality Act’s extended definition of an employee. There is also specific guidance on how to treat part time workers, partners and overseas workers.
We are already working with a number of clients who require additional support in order to comply with the new legislation and in particular the two areas discussed above. If you are unsure about anything, we recommend you seek specialist advice in these areas before you pull together your figures.
Finally, employers will need to make sure they treat all the pay elements correctly. Some pay items are classified as ‘ordinary pay' for the purposes of the regulations and others are not. For example, basic pay and allowances are classified as ordinary pay but overtime and redundancy payments are not. There are also some complex rules surrounding the treatment of salary sacrifice.
Gender pay gap reporting narrative
The figures that are required to be published online simply provide a snapshot. This will keep you compliant. However, in our opinion, figures will be best supported by a narrative.
The narrative is voluntary but employers should consider what their figures might say about them without organisational or sector context. A well-researched, analysed and scripted narrative will help employers successfully position their own organisation’s figures. It is for this reason we are seeing quite a few employers not only ask for help running their calculations, but also in drafting a narrative based on a deeper analysis into their figures and the sector they work within. If a gap is particularly high, a narrative can help to explain the reasons for this. If the figure is favourable, you may want to share the initiatives that have led to you achieving this.
If you are concerned about what a deeper analysis and narrative might uncover, you may decide it prudent to engage legal advice before you carry out this piece of work to ensure the findings are covered under legal privilege.
Additional reporting requirements for the public sector
In addition to the reporting requirements applying to private and voluntary sectors, public sector employers are required to provide additional reporting.
The regulations state that:
'The information a public authority publishes in compliance with paragraph (1) [of the regulations] must include, in particular, information relating to persons who share a relevant protected characteristic who are
(a) its employees;
(b) other persons affected by its policies and practices.'
This is in line with the requirements which already exist under the Public Sector Equality Duty (PSED), the deadline for reporting has simply been amended to be aligned with the Gender Pay Gap reporting timetable.
The Gender Pay Gap reporting requirements will now be incorporated into the reporting requirements of the PSED.
PSED aims to:
- eliminate unlawful discrimination, harassment, victimisation and any other conduct prohibited by the Equality Act 2010;
- advance equality of opportunity between people who share a protected characteristic and people who do not share it; and
- foster good relations between people who share a protected characteristic and those who do not.
Download the full report where we explore the seven key areas to help your organisation close its gender pay.