This post was contributed by Daniel Jacobs, Trainee Solicitor, Norton Rose Fulbright LLP, London
Gender Pay Gap Reporting
What is the gender pay gap?
Despite a longstanding prohibition on gender discrimination, on average, woman still earn less than men in the UK. According to the Office for National Statistics, in 2015, the gap between average female earnings and average male earnings for full-time employees was 9.4% and 19.2% for all employees.
Gender pay gap report
In July 2015, the Prime Minister announced an ambition to “end the gender pay gap in a generation”. Following numerous consultations, and in order to begin to achieve this aim, the government has released a draft set of regulations. These draft regulations set out that private and voluntary sector employers with at least 250 employees will be required to publish an annual gender pay gap report. The final regulations are expected to come into force in October 2016.
The gender pay gap report will require affected employers to publish:
- overall gender pay gap figures;
- the numbers of men and woman in different pay bands (which will show how the gender pay gap differs at different levels of seniority);
- gender bonus gap figures; and
- the proportion of male and female employees who received a bonus.
The data for the information will be taken from a snapshot of the position on 30 April 2017 and annually thereafter.
Each year, by no later than 29 April, the gender pay gap report must be published on the employer’s own website in the UK and uploaded to a government website. Employers will have the option to include a narrative to accompany the figures, which will enable employers to explain any gender pay gap and the actions being taken to reduce it.
Penalty for non-compliance
Interestingly, the draft regulations do not contain any enforcement provisions or penalties for non-compliance. Rather, the government seems to be relying on the threat of negative publicity to be a sufficient motivator for employers to comply. Acrding to figures cited by the government, 84% of women aged 16 to 30 would consider an employer’s gender pay gap when applying for a job and 76% thought that companies should publish gender pay data in a prominent place on their website.
The government has stated that it may publish league tables of the gender pay gap and may publish the identity of non-compliant employers. This would increase the pressure on employers to comply with the regulations.
What can employers do to prepare?
Although the final regulations are still being drafted, employers should begin to prepare for the new regime, to ensure that they are in the strongest possible position. For example, it would be prudent to undertake a pay and bonus audit, so that any necessary changes can be made in advance.