Fastest 50: Mind the gap... gender pay reports are on the agenda

Harmajinder Hayre
Harmajinder Hayre
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Recruiting and retaining the right workforce is crucial to the success of any fast-growing business. From next month, companies face their latest challenge on the employment front.

From April 6, private and voluntary employers with 250 or more employees will be required to report on their gender pay gap.

Employers need to publish statutory calculations each year showing the average mean and median gender pay gap and bonus pay gap within their workforce.

The results must then be published on the employer’s own website and a Government-hosted site. The first set of statistics for private and voluntary employers must be published by April 4, 2018 and annually thereafter.

The data for the calculations needs to be collected on April 5, 2017.

The “employees” for whom the data must be provided include those employed under a contract of employment, a contract of apprenticeship and a contract personally to do work. Agency workers, partners and employees on reduced rates of pay whilst on family or sick leave are excluded.

The gender pay gap is based on the difference in the gross hourly rate of pay of male and female employees. “Pay” is gross pay calculated before any deductions at source and will include basic pay, paid leave, allowances, shift premium pay and any portion of bonus payment that is proportionate for the relevant pay period.

There is no set penalty for non-compliance. However, there would be a potential reputational risk to those employers that failed to publish their gender pay gap.

Employers are likely to be concerned about the potential impact of publishing gender pay figures. These statistics could create a feeling of inequality and dissatisfaction within the workforce. Whilst the gender pay gap differs from equal pay, this could lead to an increased risk of an equal pay claim if employers fail to manage any gap effectively.

However, employers can go some way to limiting these issues by publishing a detailed narrative along with the figures. This is an opportunity for employers to explain the reasons for any gap, the steps they have already taken and those they will take in the future to address any gap.

Despite the first report not needing to be published until April 2018, there is a lot of preparation that employers need to do. The key things to consider are:

• will you have 250 or more employees on April 5, 2017? If so, you will have to collect the necessary data and publish a report;

• is everyone aware of this requirement? Discuss it with the directors and key departments;

• what information will you need to collect on April 5? Look at pay variables and weekly hours and ensure this data can be collected;

• who within the business will have responsibility for this project? Time and resource needs allocating; and

plan ahead! It is going to take time.

• For more information on the issues raised by this article, email harmajinder.hayre@wardhadaway.com or phone 0113 205 6712.