Gender Pay Gap Reporting: key changes at a glance
The Equality Act (Gender Pay Gap Reporting) Regulations 2017 require private and voluntary sector employers with 250 or more employees to publish a gender pay gap report by 4 April 2018 and annually thereafter. Although the publication deadline for the first report is some way off, the report must be based on pay data as at 5 April 2017, including bonuses paid within the 12 month period ending on 5 April 2017.
The final version of the Regulations was finally published on 6 December 2016. Subject to parliamentary approval, the Regulations are expected to come into force on 6 April 2017.
While the core obligations on employers are largely unchanged in the final version, there are several changes to the detail and employers who have already made headway with their reporting plans, based on the original draft of the regulations will need to check that their methodology is in line with the new, highly prescriptive requirements.
The key differences between the draft and final regulations include:
- New snapshot date of 5 April 2017, and first reporting deadline of 4 April 2018.
- Extended to cover employees, apprentices or those contracted personally to do work ("workers").
- Relevant employees for both pay and bonus pay figures must be employed on 5 April 2017.A new concept of "full-pay relevant employee", which for the purposes of calculating pay gap figures removes those on leave and paid at reduced or nil pay. There are also tweaks to the definition of "ordinary pay" and "bonus pay".
- A new six-step process for working out the "hourly rate of pay" for comparison purposes.
- Clarification that pay quartiles are calculated by dividing the workforce into four equal sized groups, after ranking employees in terms of pay, as opposed to dividing the overall pay distribution into four equal proportions.
This article is for general guidance only. It provides useful information in a concise form. Action should not be taken without obtaining specific legal advice.