Latest News

Gender pay gap
  • Published:
    15 February
  • Area of Law:

Gender Pay Gap: are you ready?

With less than two months to go until April 5 2017 when the Equality Act 2010 (Gender Pay Gap Information) Regulation 2016 (“the Regulations”) come into force, a recent Xpert HR survey found that “employers have a limited idea of what they will do, and lack the practical experience to measure and report on their gender pay gap data”.

The Regulations will compel all employers within the private and voluntary sectors with 250 or more employees to declare their gender pay gap, but only a minority of employers had any formal mechanisms in place prior to the legislation being announced. Separate Regulations will also extend the duty to public sector employers and these are expected to come into force on 31st March 2017.

A quick reminder: what you need to do

You need to calculate:

• Your mean gender pay gap.
• Your median gender pay gap.
• Your mean bonus gender pay gap.
• Your median bonus gender pay gap.
• Your proportion of males and females receiving a bonus payment.
• Your proportion of males and females in each quartile band.

You then need to:

• Provide a written statement confirming that calculations are accurate, which must be signed by an appropriate senior person e.g. a director or chief executive.
• You can also provide a narrative to help people understand why a gender pay gap exists in your organisation and the steps you are taking to close it.
• Upload the information somewhere accessible on your own website by 4 April 2018.
• Upload the information on a designated government website (details yet to be confirmed).

 Key points to remember:

• It is not as tricky as at first it might seem – the key is the collation of information and carrying out basic calculations using standard computer software.
• Gender pay gap is different to equal pay audits – equal pay deals with the comparison of one job to another; the gender pay gap is about the difference in gender pay across a whole organisation.
• Statistics show that a gender pay gap still exists and there are business advantages to eliminating this. Global consultancy McKinsey estimates that bridging the UK gender gap in work has a potential to create an extra £150 billion on top of 2025 business–as–usual GBP forecast.
• Just because you have an equality action plan, doesn’t mean that you can ignore these Regulations. Ensure gender pay actions are built in to the equality action plan but also remember the reporting obligations.
• Remember it is not always women who receive less money than men. Whilst it is often the case that on average women earn less money than men in many workplaces, sometimes it can be men – watch out for a negative gender pay gap which would identify this.

Why is it important to take measures to close the gap? Obviously compliance with the legal requirements is a key driver but also consider the following:

• Staff turnover may be reduced.
• It may assist in being viewed as an employer of choice.
• It can help employee engagement and productivity.
• It may assist with better management and retention of an organisation’s talent base.
• It can help compliance with supply chain initiatives.

What next?

Although there has been a slow down of pace and detailed timelines companies need to analyse their gender pay gap each April, and publish a report within 12 months. Thereafter, companies need to produce and publish an annual report. The deadline for publication of the first gender pay gap reports will be 4 April 2018.

Every company is unique and needs bespoke tailored advice to ensure they proactively manage their obligations when it comes to gender pay reporting. However, we have produced a technical briefing which provides an insight into who will need to comply, how to calculate the gender pay gap and some key considerations. In addition, we are hosting a series of events which will provide a valuable insight into gender pay reporting, the requirements under the draft Regulations and how you can get an early start on addressing the requirements.

You can access our technical briefing here; or register for one of our events here.

"This is exactly why we like to work with people who understand the industry and can identify potential issues and create solutions."

Jon Saltinstall, Senior HealthCare Banking Consultant, Lloyds Bank