Gender pay gap: an update

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There has been much controversy surrounding the topic of the gender pay gap. Many stories have been released recently surrounding this topic. Recent stories include the BBC releasing information about their highest paid stars[1], and a Google employee sending a memo blasting the company’s diversity policies[2]. The new pay gap regulation came into force from 6th April 2017. So now is a good time to make sure you know how these regulations will affect your business.

What is it?

The gender pay gap is different from equal pay, where men and women must be paid the same for equal or similar work. It is the difference in average pay between the men and women in your workforce.

Does it affect me?

The mandatory pay gap regulations apply to ‘large employers’; any employer with at least 250 employees including full- and part-time workers. Employers with fewer than 250 employees are encouraged to participate but are not required to.

Mandatory reporting

Under these new regulations, employers must report on the following:

  • Gender pay gap (mean and median averages)
  • Gender bonus gap (mean and median averages)
  • Proportion of men and women receiving bonuses
  • Proportion of men and women in each quartile of the organisation’s pay structure

What information needs to be included?

The first step is to gather information on how much each employee is paid in the relevant pay period. The relevant pay period is the pay period in which the ‘snapshot date’ falls. The snapshot date is the 31st March for public authorities and 5th April for private businesses. Any employee who is employed on the snapshot date and who is paid their usual full basic pay during the relevant pay period should be included in the report. If an employee is being paid less than their usual basic pay as a result of being on leave, such as maternity or sick leave, then they will not need to be included.

How to report

Employers must release the necessary information annually by 30th  March for public businesses and 4th  of April for private businesses The information must be available on the employer’s own website as well as the government’s designated website which will be available for public viewing. These records will be publicly available for at least three years.

Businesses have the option of proving a narrative alongside their report. It is recommended that this is done, if necessary, to explain the reasons for the results and to set out any actions which will be taken in future to reduce the pay gap.

For full details, visit ACAS’s report on how to manage pay gap reporting. – http://www.acas.org.uk/media/pdf/m/4/Gender_Pay_Reporting_GUIDE3.pdf[3]

Why is this so important?

Aside from being a legal requirement for large businesses, this reporting is seen by many as a positive step towards addressing the pay gap between men and woman. In the top 10% of highest earners, men were paid 54.9% more than their female counterparts[4]. Reporting will help organisations understand the size of their pay gaps, and therefore the causes and issues can be identified and addressed. Annually publishing your business’ gender pay gap will help you monitor how effective your actions are to reduce it, to ensure your workplace is as fair as possible.

There are around 9000 companies that fall under these requirements. If you are one of them, you must comply and publish your company’s results before 4th April 2018.

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[1] http://www.bbc.co.uk/news/entertainment-arts-40661179

[2] http://www.bbc.co.uk/news/entertainment-arts-40661179

[3] http://www.acas.org.uk/media/pdf/m/4/Gender_Pay_Reporting_GUIDE3.pdf

[4] http://www.equalpayportal.co.uk/statistics/

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Rachel has 3 years experience in marketing and is enthused by copywriting and content production.