It will impact employers with 250 or more employees. That’s an estimated 7,960 employers that employ around 11.3 million employees or about one third of the UK workforce.
The planned timetable is that the provisions will come into force in October 2016. Due to the proposals having cross party support it is likely that this target will be met.
The first ‘snapshot’ of the workforce data will be taken as at 30 April 2017. Employers will then be required to publish their first ‘gender pay gap’ figures before the end of the year i.e. the latest date for first publications will be April 2018.
The data that employers will be required to publish will consist of:
- The overall mean and median gender pay gap
- A separate bonus gender pay gap figure
- The number of male and female employees in ‘salary pay bands’ – the employer to divide their pay range into four.
The overall difference in mean and median pay rates will be taken as at 30 April each year. Whereas the differences in bonus payments will require the employer to calculate all bonus payments made over the course of the year.
Possibly the most telling figures will be in relation to the requirement to place male and female employees in four bands within the employer’s pay structure.
It had been debated whether the pay gap information should be published in relation to part-time and full-time roles or even by grade and job type. However, it was considered that such requirements could be complex and would be too great of a burden on employers.
Instead it has been decided that the employer should identify the four salary bands by reference to the range of pay rates in their organisation. The lowest paid employees will be in band A and the highest paid employees in band D. This will be based on the gross hourly rate of pay as at 30 April each year.
If this shows that the majority of employees in band A are female the risk is that the employer’s reputation may be damaged. Giving an explanation of the figures may help to put this in context, particularly if there are any initiatives that may have been implemented to attract more women into the better paying roles.
This may go towards mitigating the risk of reputational damage particularly as the information will need to remain clearly visible on the employer’s website for at least three years from publication.
However at the same time as the data is published on the website the employer will also need to upload the information to a Government department which may later publish the information in a sector by sector analysis. It is possible that this could lead to ‘league tables’ in certain sectors as to who ranks best and worst for pay equality. Employers that fail to publish the information may be ‘named and shamed’ in the same way as national minimum wage defaulters can be now.
*Equality Act 2010 (Gender Pay Gap Information) Regulations 2016