New law: gender pay gap reporting
Big change. The government has raised concerns about differences in pay between men and women for many years. While it has had limited success with voluntary pay reporting schemes, it has now decided to go further and introduce legislation. This decision has resulted in the proposed Equality Act (Gender Pay Gap Information) Regulations 2016 which were published in February 2016. The draft Regulations set out the framework for the new gender pay reporting requirements. It’s anticipated they will come into force on 1 October 2016.
New legal requirement. The Regulations will require employers to publish: (1) mean and median pay information for their entire workforce - in other words, the average and the middle point pay rates for employees; and (2) how many men and women appear in each of the four pay bands (which are yet to be set). Not only must this mandatory gender pay gap reporting information be published on the employer’s website every year and left up there for at least three years, the information will have to be filed with the government too. Assuming the Regulations come into force in October 2016, the first gender pay gap reports will need to be published by 30 April 2018 at the latest (based on pay rates at 30 April 2017) and annually thereafter.
Tough penalties. Those employers who fail to comply with the Regulations are to be publicly named and shamed in the first instance. Further civil and criminal penalties for non-compliance are definitely on the cards.
Tip. Now for the good news. These Regulations will only apply to private and voluntary sector employers in England, Wales and Scotland that have 250 or more employees. So if you have fewer employees than this the change won’t affect you at all. There are no plans to extend gender pay reporting to smaller business but this hasn’t been completely ruled out.
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