The final version of the Gender Pay Gap Regulations 2017 has been published and they set out how employers should calculate and report the gender pay gap within organisations with 250 or more employees from April 2017.
The Regulations require affected employers to publish:-
- Overall gender pay gap figures calculated using the mean (average) and median (middle) average hourly pay.
- The numbers of men and women in each of four pay bands (quartiles) based on the employer’s overall pay range.
- The annual bonus gap between men and women.
Employers will have the option to include a narrative explaining any pay gaps and setting out what action they plan to take to close them. The provision of a narrative will be strongly encouraged, but it will not be mandatory.
The Regulations have a broad definition of employee. It includes employees, zero hours workers, apprentices and self-employed workers who are engaged directly by employers consultants, independent contractors etc. Agency workers and partners, including LLP members are excluded.
For the purposes of gender pay reporting, 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 pay for a different pay period, overtime pay, expenses, the value of salary sacrifice schemes, benefits in kind, redundancy pay, arrears of pay and tax credits.
The Regulations require employers to calculate its gender pay gap using data on a single pay period around the snapshot date of 5th April, while bonus gap metrics cover the whole year to April 2017.
Although the first gender pay gap reports do not have to be published until April 2018, there are several steps employers should consider to prepare for the new regime:-
- Identify whether you are a relevant employer. Consider who is a relevant employee, and whether there are likely to be 250 or more employees in your organisation as of 30th April 2017.
- Consider the employment status of those who may be regarded as relevant employees under the Regulations.
- Identify any areas of uncertainty. For example, is pay data readily available?
- Consider the remuneration package offered, all benefits, and any flexible benefit schemes.
- Carry out an audit of bonus schemes offered by the Company.
This is an ideal time to carry out a dry run of your gender pay report in advance of the real so as to identify any problem areas and decide what additional analysis you may want to do in order to present your report in the best light. We can help you with this and with any questions you may have about the new rules.
Employers who have queries regarding the above should contact Sally Morris at firstname.lastname@example.org or on 01905 734032.