What is the gender pay gap?
The gender pay gap shows the difference between the average earnings of men and women.
Do you have to report?
The reporting requirement applies to private sector employers in England, Wales and Scotland, that have over 250 employees as of 5th April each year and whose contracts are governed by UK legislation.
The term employee widely defined to include those employed under a contract of employment, a contract of apprenticeship or a contract to personally carry out work.
Each separate legal entity within a group of companies that has 250 or more employees is required by law to provide a gender pay report.
Which employees must you report on?
Reports must be provided for all those employed on 5th April (the ‘snapshot date’) each year. Exceptions to this include Partners, LLP Members and Agency Workers. Employees provided by agencies will be included in the report from their agency rather than the company they are working in.
If pay data is not readily available for those contracted to personally carry out work for an employer, this information can also be excluded.
What do you have to report on?
If you exceed the 250 employee threshold, you will be under a duty to publish certain information about gender and pay on an annual basis.
You must publish, for 2017 and each subsequent year, the following information:
- The difference between the mean hourly rate of pay for male and female employees
- The difference between the median hourly rate of pay for male and female employees
- The difference between the mean bonus pay paid to male and female employees
- The difference between the median bonus pay paid to male and female employees
- The proportions of male and female employees who received bonus pay
- The proportions of male and female employees in the lower, lower-middle, upper-middle and upper-quartile pay bands
Providing a narrative
Although optional, it is strongly encouraged to publish narrative to accompany pay gap information, particularly when the differences are considerable.
This provides an opportunity to offer an explanation to help to put the figures into context and provide a narrative about remedial steps that are being taken to reduce the gender pay gap.
Where to publish the information?
The pay gap information must be published on a searchable UK website that is accessible to employees and the public. It will be required to be maintained for at least three years to allow progress to be tracked. The information must also be uploaded to a government website, which will be used to monitor compliance and to prepare and publish tables showing the pay gap across particular sectors. The gender pay information must be accompanied by a written statement confirming that the information is accurate and must be signed by an appropriate person. The signatory will depend on the legal status of the business. If you are a limited company, a Director must sign the declaration.
Sanctions for non-compliance
There is no specific enforcement mechanism or sanction for a failure to comply. From a reputational point of view, however, it is unlikely to be advantageous if you decide not to report at all.
When will employers have to report their gender pay gap information?
Employers must perform the data analysis by reference to the 5 April 2017 pay period (and the preceding 12-month period for the purposes of the bonus gap). Employers can then report this information on a date of their choosing, provided it is reported by no later than 4 April 2018.
There is no requirement to publish at the same time each year (although the calculations will always be tied to 5 April).