Please Mind the Gender Pay Gap (Part 3).

By Andrew Knorpel 15th December 2016

We are pleased to announce that the delayed gender pay gap legislation will soon be arriving.  The re-timed service to greater pay equality is now expected to come into force on 6 April 2017 and revised draft Regulations were published on 6 December 2016.

We have previously reported on the initial and further consultation exercises.  The main changes to the last set of draft Regulations are –

• The first report must now be published on or before 4 April 2018, based on a snapshot taken on 5 April 2017
• They must be based on pay for both employees and workers (other than LLP members), including those based outside the UK
• So that the figures aren’t skewed by those on leave, the reports will exclude those staff on reduced or nil pay due to being on leave
• The reports will set out differences between not just mean and median ordinary pay for men and women, but also mean and median bonus pay
• The element of bonus pay to be included in the average ordinary pay calculations should only be that which is proportionate to the pay period in which it is paid, not necessarily the entire bonus payment
• There are now detailed methods of establishing an employee’s weekly working hours (where they have no normal working hours) and then calculating the average “hourly rate of pay”
• For the purposes of calculating the proportion of male and female staff in each pay quartile, the four quartiles are now clearly stated to consist of equal numbers of staff
• The EHRC may take enforcement action against any employer which fails to publish a report

We would still strongly encourage employers to consider providing additional information in any event to explain any pay gaps and what action (if any) they propose to take to address such gaps.  You might also wish to provide a completely new set of average figures –

• Including those staff on leave, based on their full pay remuneration
• Including the value of non-monetary benefits, to allow (for example) the value of cars to be included, not just car allowances
• Excluding bonus pay from ordinary pay, to avoid only including bonuses paid in the pay period of the snapshot and ignoring bonuses paid at other times of the year

Employers will need to establish the best time of the year to publish their first report (perhaps with their company annual report), bearing in mind that they will be stuck with that date in future years.  Some thought should also be given as to how staff will be informed about the content of the report and how the employer will deal with any issues which may then be raised by staff.

As we have advised before, please listen for further announcements.

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