BE GENDER-BASED PAY REPORTING READY FOR 2018
LUKE HUTCHINGS >
PartnerFri 5 January 2018
A challenge for larger private enterprises and smaller public sector employers this year will be complying with the new requirements to publish a number of calculations revealing how large the pay gap is between their male and female employees. In this note we have focused primarily on the requirements placed on larger private employers.
The deadline to report is 4 April 2018. The reports must be based on hourly pay rates as at 5 April 2017 and those bonuses paid between 6 April 2016 and 5 April 2017.
Businesses that are “in scope” are those which employed 250 or more persons on the “snapshot” date of 5 April 2017. As the calculations must be published annually, the reference date for the number of employees will always be 5 April. Corporate structures should bear in mind that group companies report only on behalf of their own employees, but bear in mind that a wide definition of “employee” is used in the regulations and some self-employed workers could be caught by the requirements.
The calculations that must be published for qualifying businesses are:
- The difference between the mean hourly rate of pay of relevant male employees and relevant female employees;
- The difference between the median hourly rate relevant male employees and relevant female employees;
- The difference between the mean bonus pay award paid to relevant male employees and relevant female employees;
- The difference between the median bonus pay paid to relevant male employees and relevant female employees;
- The proportions of relevant male and female employees who were paid bonus pay in the relevant period;
- The proportions of relevant male and female employees in four notional quartile pay bands.
These calculations sound complex but appropriate guidance is available from ACAS and other Government bodies.
Once the calculations have been prepared, they must be placed on their website so that it will be accessible to employees and the wider public for at least 36 months. There must also be a signed declaration by a Director (or equivalent) attesting to the accuracy of the information.
Employers are free to provide a commentary to explain differences identified in the calculations, while not legally required, such a commentary could head off challenging questions from third parties. It is recommended that work is done while the figures are being calculated to understand them and explain differences.
There are no specific penalties for non-compliance, but press interest will be high and businesses that do not comply with the requirements might find there is a significant risk of damage to reputation, associated brands and goodwill. There may be an effect on recruitment. Of course, penalties could well be introduced in future legislation.
Personally whilst I think the the requirement to publish these calculations might be viewed as an administrative burden, advice and guidance is out there for those businesses concerned with doing things right.
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