Following a consultation on publishing information about the gender pay gap (weekly LELR 429), the government has issued draft regulations. These require large employers to publicize what they pay male and female employees on average.
Subject to the agreement of parliament, the Equality Act 2010 (Gender Pay Gap Information) Regulations 2016 will come into force on 1 October 2016, affecting employers with at least 250 employees. However, they will not have to publish the required information for about 18 months after the regulations start so that they have time to introduce the necessary systems and processes.
After that employers must publish the information annually. This includes the mean and median gender pay gaps, based on an hourly pay rate, and the average gender gap for bonus payments. In addition employers must publish the number of men and women at each of 4 levels of the pay distribution.
Pay includes basic pay, paid leave, maternity pay, sick pay, area allowances, shift premium pay, bonus pay and other pay (including car allowances paid through the payroll, on call and standby allowances, clothing, first aider or fire warden allowances). It excludes overtime pay, expenses, the value of salary sacrifice schemes, benefits in kind, redundancy pay, arrears of pay and tax credits.
Employers must publish the information in English on their UK website, ensuring that is readily accessible to employees and the public and keep it online for three years in order to show the progress made. The employer’s website also has to be linked to a government-sponsored website.
The regulations, which apply in England, Scotland and Wales to private and voluntary sector employers, will be reviewed in five years’ time. The government has not created any penalties for failure to comply with the regulations but says it will be “closely monitoring levels of compliance”.
Caroline Underhill of Thompsons Solicitors commented “More transparency in pay is essential for collective bargaining and for individuals to enforce their rights against employers but the government has missed a trick here (deliberately or otherwise) by failing to insist on publication of pay rates by grade or equivalent level. Whilst the draft regulations should help employers understand gender discrimination in pay it is action that is required and this will do nothing to tackle those employers who persistently refuse to recognize and remedy inequality”.
To comment on the regulations, go to: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/500088/Mandatory_Gender_Pay_Gap_Reporting_Consultation.pdf