Please Mind the Gender Pay Gap (Part 2).

By Andrew Knorpel on 25 February 2016

This is a customer announcement for those employers waiting on all platforms for the 20.16 service to gender equality.  Further to the Government’s consultation exercise last July, this service will soon be ready to depart.

Employers of at least 250 employees not in the public sector should be aware that this service, currently subject to further consultation on the fine detail, is likely to lead to major engineering works in their HR function in order to gather various pay data for publication.  The first report on pay data should be based on the pay period including 30 April 2017, identifying the percentage difference between average men and women’s pay.

For basic pay, this will be both the mean average (calculated as total pay of men/women divided by the number of men/women) and median average (the middle value of all individual salaries of men/women listed in order).  Basic pay will include all usual payments and bonus payments, but not items such as overtime of the value of benefits.

If this proposal remains unchanged, these averages will be significantly skewed by staff receiving maternity pay (or other statutory pay including sick pay) or the receipt of an annual bonus in the particular pay period being reviewed.  If so, each employer may wish to publish further information based on the full basic salary of staff which would ordinarily have been received.  Employers will be encouraged to provide additional information in any event to explain any pay gaps and what action (if any) they propose to take to address such gaps.

In addition, employers must identify the percentage difference between mean average men and women’s bonus pay earned in the preceding 12 months, including productivity and performance-related bonuses, as well as the proportion of men/women who received such bonus pay and the total number of men/women in quartile pay bands.

At present, it is proposed that the information will need to be confirmed as accurate, published on employers’ websites within 12 months of the relevant date (firstly with regard to 30 April 2017 and annually thereafter) and uploaded to a Government website.

Hopefully, the further consultation on draft regulations presently being undertaken will lead to clarification on a number of issues, particularly the maternity pay point referred to above and exactly how the quartile pay bands are to be identified.  Please also note that staff other than employees (such as workers) are no longer included in the proposed pay reporting obligations.

For the time being, please be aware of the imminent need to provide your gender pay gap information when asked to do so and listen for further announcements.

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