The term “Gender Pay Gap Reporting” has been a topic of discussion throughout 2016 and, although it currently only applies to organisations with 250 or more employees, it wouldn’t be right to discount it as something that doesn’t matter, yet. Several of our clients are approaching larger numbers of employees and, even for those who aren’t, being prepared for growth is essential.
We’ve put together some quick information on what this reporting means, how it may affect your business in the future, and what is involved.
Who needs to report?
Private and Voluntary sector organisations with 250 or more “relevant” employees in England, Wales, and Scotland. In companies with a group structure, each legal entity will need to report it’s data. There is no legal requirement on smaller employers to report data yet, but they will be encouraged to do so.
What is a “relevant” employee?
Relevant – all employees, including zero hours workers and apprentices, who are employed on 5th April, work mainly in England, Wales, or Scotland, and are on full pay.
Not-Relevant – Partners of Limited Liability Partnerships, agency workers (it is expected that they would be included in any reporting by the agency with which they hold a contract of employment), and employees on reduced rates of pay whilst on maternity leave or sick leave.
When will you be required to report?
Qualifying employers will be required to take a first data snapshot in April 2017 which should be analysed and published on a date of their choosing but no later than April 2018. Reporting is then required annually.
What figures need to be reported?
Employers are required to publish 6 metrics:
- Mean average gender pay gap
- Median gender pay gap
- Mean gender bonus gap
- Median gender bonus gap
- Proportion of men and women getting a bonus
- Proportion of men and women in each of the four pay quartiles
Calculations for the pay gap metrics are to be based on a single pay period around the “snapshot date” of 5th April, while bonus gap metrics cover the whole year to April 2017 (and each April following).
How and where should figures be reported?
A report containing a written statement signed by a director must be published to a company website accessible to employees and the public and it must remain available for 3 years. There is no legal requirement to publish commentary explaining the figures but it is strongly encouraged, including any remedial action to be taken. The report must also be uploaded to a government website, to be released.
What are the penalties?
There will be no civil penalties for non-compliance ,although the government is keeping this under review. However, the associated negative publicity, reputational damage, and employee relations risks of non-compliance will likely be far more damaging.
What should you do next?
If your organisation is approaching large numbers of employees, it would be wise to implement a process and begin collating the data required for reporting. If you are a current Accounts or HR client, speak to your advisor on how you can begin reporting.
If your employee numbers are a long way from 250, it would still be good practice to collate this data. The government may introduce reporting for smaller employers, but having this information anyway and putting measures in place to restore any imbalances can have a large impact on your staff retention, public image, and salary structure.