April 6 2017 heralds a major change for all private and voluntary sector organisations in England, Scotland or Wales who have 250 or more employees. From this date, 8,000 large companies, that collectively employ 11% of the UK’s total workforce, will need to collect and publish an extensive amount of data on the differences between what their male and female employees are paid.
The second significant date for gender pay gap reporting is April 4 2018. This is the date by which all affected companies must publish the results of the first year of gender pay gap analysis, i.e. for the period since April 6 2017.
The Government Equalities Office defines the gender pay gap as “an equality measure that shows the difference in average earnings between women and men.” The Government says that this has fallen to its lowest ever level, at 18%.
Note that the gender pay gap is not the same issue as equal pay. The gender pay gap is simply the difference between the average earnings of your male and female employees, and the roles they carry out are irrelevant.
Equal pay refers to a legal requirement, introduced in the UK some 45 years ago, to pay men and women the same salary if they are carrying out the same role, or a role of equal value.
The new obligations have been introduced under The Equality Act 2010 (Gender Pay Gap Information) Regulations 2017.
If your company is affected by the new requirements, you should consider producing gender pay gap data for previous financial years as something of a ‘trial run’ to ensure you are ready to comply with the new law from April this year.
Minister for Women and Equalities, Caroline Dinenage MP, said:
“No one should ever be held back just because of their gender. We now have the lowest gender pay gap on record, but we still have to push further.
“Shining a light on the gaps is absolutely key to achieving equality in the workplace, which is why we are introducing requirements on all large employers to publish their gender pay and bonus data from April.”
The Government is expected to extend the gender pay gap reporting requirements to public sector bodies, and organisations in this sector may also be subject to the requirements as early as April 2017.
Your company now needs to consider whether it is comfortable with carrying out the necessary calculations in order to produce the required gender pay gap data. If you aren’t comfortable carrying out this task, then now is the time to start talking to any third party payroll provider you use, and asking if they can provide this service on your behalf.