The difference in pay between men and women has been a debate for some time. The Office of National Statistics is reporting that on average women earn 19.2 per cent less than men in full time roles. In an attempt to overcome the gender pay gap the government has published draft regulations.
What does this mean for you?
The new regulations will apply to all employers in the private and voluntary sector with 250 employees or more. From April 2017 these new regulations will require reports to be published on the company website on an annual basis.
Even if you are a smaller company our advice is to keep listening. As your employees become aware of the regulations and start to query the gender pay differences in your organisation you could be left open to sex discrimination, equal pay and potentially constructive dismissal claims.
What do you need to report?
All reports will need to be published using the calculations below:
- the mean gender pay gap;
- the median gender pay gap;
- the gender bonus gap;
- the numbers of men and women who received bonuses; and
- salary quartiles.
These figures should be calculated using gross pay, before any deductions are made. They are defined in the regulations as including basic pay, maternity pay, paid leave, sick pay and bonuses.
Clarity on whether bonus reporting should include bonuses earned but not yet received is still to come, but as an initial overview organisations should report on:
- payments in relation to profit sharing, productivity, performance and other bonus or incentive pay and commission;
- long term incentive plans or schemes; and
- the cash equivalent value of shares on the date of payment.
Why make the change?
Publishing information that highlights inequalities in pay could have significant implications for your organisation. These include damage to your employer reputation, negative press or costly equal pay claims. By being proactive and carrying out an equal pay audit you will be able to identify any gender pay gap issues and address these. Please contact us for advice and guidance on the reports or how to address any pay issues.