The Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 came into force on 6 April 2017. All private and voluntary sector businesses in Great Britain with 250 or more employees are now required to publish information annually stating the differences in average pay and bonuses of their male and female employees.
Employers will be required to take a snapshot of gender pay data as at 5 April every year and publish it on both a Government website and their own website (where it must be kept for three years).
Reporting by 4 April 2018
Several thousand entities in Great Britain will be required to publish by 4 April 2018 but as companies can publish their results at any point up to 4 April 2018 only just over 250 have done so to date. Failure to report by the deadline will be unlawful and, whilst there are no sanctions for non-compliance at present, the failure to report this data could clearly be of significant reputational risk.
Calculating the numbers
Different categories of employees are included for different assessments and will require data to feed in from a number of sources within a company including payroll, HR and reward. In a group situation, every employer is treated separately so a group with four subsidiary companies and 2,000 UK employees could be required to submit four separate reports.
The gender pay reporting process will probably be complex and absorb senior resources in most organisations. Therefore, it is important to plan ahead, particularly on the timing and obtain support of senior leadership. It is likely that the focus will initially be data analysis. However, the medium and long-term focus should be on how to address any gender pay gap.
While publication of the data results is mandatory, the publication of an explanatory narrative is optional. However, managing market reaction and both existing and future employee reaction is likely to quickly become a factor in both recruitment and retention of staff. So we strongly recommend that explanations are carefully prepared – for example, a narrative highlighting anomalies, explaining a poor (or emphasising a good) result and also setting out the employer’s policy on how it intends to address any gender pay gap going forward.
Are you ready?
Large employers should be thinking about gender pay reporting now, well in advance of 4 April 2018, and ensuring they have robust HR and payroll systems to deliver the data required to make the calculations. And if you need professional assistance to prepare the reports, it is better to seek help earlier rather than later. For example, companies with complex pay structures relating to equity awards and/or internationally mobile employees are expected to need specialist support.
If you would like more information, please contact a member of our tax team on 02890439009.