Following a consultation which concluded in September 2015, the Government has now published the draft Equality Act 2010 (Gender Pay Gap Information) Regulations 2016 (the “Regulations”) setting out details of new measures which will come into force in October 2016 and require compulsory gender pay reporting by qualifying employers.
Who? Employers in England, Wales and Scotland with at least 250 employees will be required to publish gender pay information. For the purpose of the Regulations, a person is an ‘employee’ if they are employed under a contract of employment, a contract of apprenticeship or a contract personally to do work.
What? Overall gender pay gap figures using both a median and mean calculation. In addition, employers will be required to report on the number of men and women working within salary quartiles.
Base pay and bonus will be required to be reported separately.
In addition, employers will be able to provide additional contextual narrative, explaining any pay gaps and setting out what remedial action they intend to take in line with the guidance produced alongside the Regulations.
Where? The gender pay gap information will need to be published on the employer’s website (and signed off by a senior person in the organisation) and it will also be placed on a government sponsored website.
How often? Employers will be required to publish gender pay gap information on an annual basis.
When? 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 by no later than April 2018.
Penalties? There will be no civil penalties for non-compliance although the government is keeping this under review. However, the associated negative publicity and employment relations risks of non-compliance will likely be far more damaging.
The introduction of mandatory gender pay gap reporting is a positive step for diversity, will likely lead to increased transparency and is a welcome development for gender equality. However, publishing adverse gender pay gap information could also have a number of significant and harmful implications for companies including:
PwC Legal working in conjunction with PwC data analysts and reward specialists can assist companies by providing legally privileged support, which will:
In addition to helping clients with ongoing mandatory reporting obligations, PwC Legal’s reporting, discussions and action planning can take place in a confidential and legally privileged manner. This will enable companies to fully understand any gender pay gaps within the context of equal pay legislation, so that gaps can be presented in a meaningful way to minimise potential commercial and legal risks. This will also assist with the development of an action plan to minimise such gaps.
We are the market leaders in equal pay reviews and are uniquely placed with complementary teams of specialists in employment law, reward and data modelling.
We have significant experience in carrying out equal pay reviews and have worked with clients across a wide variety of industries in this area.