Legislation introducing a new requirement to publish gender pay gap information is expected to come into force on 6 April 2017. It is the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017.
Any private or voluntary sector employer with 250 employees will need to publish gender pay gap information. Separate legislation to cover public sector employers has been published today.
The trigger of 250 employees is assessed as those in employment on 5 April (the “snapshot date”) in any particular year. So if you employ a large number of seasonal workers that take you over the 250 employee threshold temporarily, for example to help with a Christmas rush, but who are no longer employed by 5 April when you have dropped to under 250 employee, the legislation won’t apply to you.
However, the definition of employment covers anyone employed “under a contract of employment, a contract of apprenticeship or a contract personally to do work”. So if you have staff on zero hours contract, even if they have not done any work for you in some time, if the contract has not been terminated they will count towards the 250 employee threshold.
The same goes for staff that are not in work on 5 April for any reason, for example because they are off sick or on maternity or paternity leave. These staff will still count towards the 250 employee threshold.
Each company in a group is a separate entity for the purposes of calculating the number of employees.
Information and method of publication
The information that must be published is:
- the difference between the mean hourly rate of pay of male and female employees;
- the difference between the median hourly rate of pay of male and female employees;
- the difference between the mean bonus pay paid to male and female employees;
- the difference between the median bonus pay paid to male and female employees;
- the proportions of men and woman who were paid bonus pay; and
- the proportions of men and woman in each of four pay quartiles.
It must be published on the company website, accessible to both employees and the public, and remain on the website for three years. The information must also be uploaded to a government website, although this is still under development.
The snapshot date of 5 April is also used when calculating pay. The starting point for the calculation is what was paid during the pay period in which the snapshot date falls. For monthly paid staff, this is likely to be their April pay period. For weekly paid staff, it will be the week in which the 5 April falls.
Pay covers not only basic pay, but also holiday pay, allowances (such as car allowance), shift premiums and any bonus that happens to have been paid during the 5 April pay period.
Specifically excluded is overtime, pay in lieu of notice, redundancy or termination payments, expenses or any non-monetary remuneration, such as benefits provided through salary sacrifice and any other benefits in kind.
Employees receiving less than full pay on 5 April are not taken into account when calculating average pay (but do still count towards the 250 employee threshold).
Although any bonus paid in the April pay period will be included in the pay calculations, there is a separate requirement to report on any bonus paid during the 12 months ending with the snapshot date, i.e. 6 April to 5 April.
Employers will no doubt be thankful that, as the first publication is not due until 4 April 2018, they have some time to get their head around what is required.