Significant progress in the field of equality has been made in recent years, with increasing numbers of women in work and in top positions. That being said, there is still work to be done. As we reported a few months ago following the publication of Lord Davies’ report into women on boards, the fight continues – women still earn less than men and occupy fewer of the key positions in successful companies. The ‘Think, Act, Report’ initiative has been instrumental in fostering support from large, global organisations committed to improving gender equality. Trailblazing Transparency, a report produced by Deloitte and sponsored by Think, Act, Report, was quickly followed by the publication of draft regulations into gender pay gap reporting. It is clear that the Government remain committed to its election pledge and employers must take note – this will remain a key issue, both legally and commercially, for years to come.
As the Rt Hon Nicky Morgan MP announced in her foreword to the draft gender pay gap regulations, “Tackling the gender pay gap is an absolute priority for this Government, as the Prime Minister has said; you cannot have true opportunity without real equality”. That is why the Government has recently embarked on the path towards mandatory reporting, with draft regulations published for consultation on 12 February 2016. The proposed regulations will apply to employers with at least 250 employees and will also encompass the public sector. With a provisional commencement date of 1 October 2016, employers are advised to start readying themselves now – while there will be an 18 month period between commencement and initial publication, preparation will ensure that all the necessary systems will be in place and the required information is comprehensive and ready to go.
What are the key points that employers should be aware of?
Pay will include 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). It will not include overtime, expenses, benefits in kind, the value of salary sacrifice schemes, redundancy pay, arrears of pay and tax credits.
All employers with at least 250 relevant employees will fall within these regulations. A relevant employee is defined as someone who ordinarily works in Great Britain and has a contract governed by UK law.
After commencement, employers will have 18 months to publish the information for the first time, and then must publish it annually thereafter. The information must be published in English on their website and be accessible to both employees and the public. The information must remain online for three years in order to show progression. Employers must also upload the information to a government-sponsored website.
Employers will be required to publish both the mean and median gender pay gaps. This will provide employers with a better understanding of any gaps identified.
Employers will be required to publish the difference between the mean bonuses paid to men and women, as well as the proportion of male and female employees that received a bonus.
Employers will be required to report on the number of men and women in each quartile of their pay distribution. This will help employers to ascertain where women and men are concentrated in terms of their remuneration.
It is clearly an exciting time in the field of equality. Consistent feedback from research companies show that a diverse workforce brings economic as well as social benefits, and it is not just gender that is on the Government’s radar – employers hoping to succeed cannot afford to take a back seat in this diverse and ever globalising economic environment.