Mandatory gender pay gap reporting
Since 1997, the gap between men and women's average pay has been monitored at a national level by the Office for National Statistics (ONS) as part of its Annual Survey of Hours and Earnings.
The Explanatory Memorandum to the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 (the Regulations) states that the overall UK gender pay gap was 25% ten years ago and is now 18.1% according to ONS statistics from October.
The Regulations came into force on 6 April 2017. They provide that employers in the private and third sector with over 250 employees on the "snapshot" date must produce annual gender pay gap reports. Similar requirements for public sector employers are contained in The Equality Act 2010 (Specific Duties and Public Authorities) Regulations 2017 which came into force on 31 March 2017.
The "snapshot" date for private and third sector employers was 5 April. So the first gender pay gap reports must be published by 4 April 2018. For those in the public sector, the date was 31 March, so the information must be published by 30 March 2018.
What needs to be reported?
Affected employers will have to publish the overall difference in the mean and median gross hourly rates of pay between male and female employees; the difference in the mean and median bonus pay; the proportion of male and female employees who have received bonus pay; and the number of men and women in each of four salary quartiles, based on the employer's overall pay range.
The information must be published on the employer's website as well as being uploaded to a government sponsored website. A written statement confirming that the information is accurate must accompany the required information.
The provision of contextual information about gender pay gap information is entirely voluntary. However, guidance issued by Acas and the Government Equalities Office states that a narrative can be a useful way of explaining a gender pay gap and showing that it does not necessarily mean that the employer has acted inappropriately or discriminatorily.
Managing the gender pay gap
As well as publishing equal pay gap reports, employers should ensure that they take steps to manage the gender pay gap. It is important that a plan is developed to redress any imbalance and that actions taken under the plan are implemented, monitored and evaluated.
While the new measures will lead to greater transparency and will hopefully, over time, redress the gender pay imbalance, they will also lead to a greater administrative burden on employers. In addition, the obligation to publish pay information will highlight the issue of equal pay and employees may look more closely at existing pay practices to see if they have any potential claims.