April 4 is the deadline to report Gender pay gaps. This new legislation requires employers with 250 or more employees to publish statutory calculations every year showing how large the pay gap is between their male and female employees.
Why do we have a gender pay gap?
The gender pay gap varies by occupation, age group and even working patterns. The gap tends to be wider in certain industry sectors. Higher in finance, energy and construction sectors and lower in areas such as support services and health and social work. The causes of the gender pay gap vary. Some causes originate outside of the workplace, such as stereotypical representations of men and women and standards in careers advice and guidance for girls.
Family life is also a factor, especially for women leaving the workplace to have a child. The Institute for Fiscal Studies reported that “there is on average a pay gap of over 10% even prior to the arrival of the first child. This gap is stable until the child arrives. There follows a gradual but continual rise in the wage gap and by the time the first child reaches the age of 12, women’s hourly wages are a third below men’s”.
What are the key points of the legislation?
- An employer must comply with the regulations for any year where they have 250 or more employees but employers of all sizes should consider the advantages.
- It includes all workers:
- those with a contract of employment,
- workers and agency workers,
- some self-employed people if they are personally contracted to do work,
- employees contracted by a UK company to work overseas.
- There are six calculations to carry out (see below), and the employer must publish results on their website and a government website. Where applicable, an appropriate person such as a chief executive must confirm their results.
- Gender pay reporting is a different requirement to carrying out an equal pay audit.
- Employers can explain the reasons for the results and give details about actions that they take to reduce or eliminate the gender pay gap.
- While the regulations for the public, private and voluntary sectors are near identical, and the calculations are directly comparable, the public sector regulations also take into account the public sector equality duty.
What is the difference between gender pay and equal pay?
Equal pay deals with the pay differences between men and women who carry out the same or similar jobs or work of equal value. It is unlawful to pay people unequally because they are a man or a woman.
The gender pay gap shows the difference in the average pay between all men and women in a workforce. If a workforce has a particularly high gender pay gap, this can indicate that there may a number of issues to deal with, and the individual calculations may help to identify what those issues are.
It is important for employers to be sensitive to how an employee chooses to self-identify in terms of their gender. The regulations do not define the terms ‘male’
and ‘female’. The requirement to report gender pay should not result in employees answering questions on their gender.
Most employers should be able to base reports on the gender details provided for through up-to-date HR/payroll records. If these records aren’t reliable, employers should preferably inform their employees that the gender pay reporting will take place and to advise staff to check their recorded gender and update it if required.
If an employee doesn’t identify as either gender, an employer can omit the individual from their calculations.
Part-time work and job-sharing
Each part-time worker will count as one employee for gender pay reporting purposes.
If an employer uses job-share arrangements every employee within a jobshare count as one employee each. This is particularly important for employers to be aware of if they generally handle employee numbers as ‘full-time equivalents’. The obligation to report and the accuracy of the following calculations depend on the number of individual employees.
What are the calculations?
An employer must publish six calculations showing their:
- average gender pay gap as a mean average
- average gender pay gap as a median average
- average bonus gender pay gap as a mean average
- average bonus gender pay gap as a median average
- the proportion of males receiving a bonus payment and proportion of females receiving a bonus payment
- the proportion of males and females when divided into four groups ordered from lowest to highest pay.
For more information regarding the gender pay gap reporting, contact our Employment & HR department. We can provide ad-hoc advice and guidance as well as ongoing support through our business packages.