- Shining a Light on the British Gender Pay Gap
- November 21, 2016 | Authors: Peter Finding; Christina Morton
- Law Firm: Withers Bergman LLP - London Office
- The Government is still on track to require private, public and third sector employers with at least 250 employees to start reporting on their gender pay gaps from April 2018. Although final regulations are still awaited the original timetable still appears to be in place meaning that employers will need to start compiling pay information from April 2017, a year ahead of the information coming into the public eye.
Office for National Statistics figures published in October, show that the gender pay gap is currently 9.4% for full-time employees - this rises to 18.1% for all employees because a higher proportion of women work part time (41% compared with only 12% of men). The figures are affected by the proportions of men and women in different roles, and vary across age groups. The Government believes the move will encourage pay parity - voluntary schemes attempted in the past have been ineffective.
10 key gender pay gap facts to be aware of
- Employers will have to publish information on their websites annually.
- Organisations need to cover their employees ordinarily working in Great Britain in their reports, but some people working outside the UK may need to be counted.
- The term 'employee' will be defined as anyone with a contract personally to do work - not just people with a contract of employment.
- 'Pay' is widely defined but excludes overtime and benefits.
- The report must cover differences in mean and median pay in four pay quartiles based on the overall pay range.
- Employers must also report on their bonuses to employees. There are specific requirements on what information will need to be calculated, read our longer note here.
- There will be specific rules on shares and other long term incentives.
- There is no requirement currently to break information down by age.
- Larger organisations might be able to argue they are out of scope, if employees are engaged by different entities and no one entity has more than 250 employees. However the final regulations may remove this possibility.
- There are no direct penalties planned for non-compliance. However, clearly failure to comply (or the existence of large pay gaps) may affect organisations' ability to attract good candidates, or in their success in tender situations. Information about pay might also be used in support of equal pay or discrimination claims. Read more about this in our fuller briefing.