The government has provided further information regarding the Gender Pay Gap Regulations, which will require that companies with more than 250 employees must annually publish information regarding the difference in average pay for male and female employees.
In July 2015, the then Prime Minister made clear his intentions to close the gender pay gap “within a generation” and in October 2015 he announced that large public sector organisations would be required to publish information regarding their gender pay gap. On 22nd march 2016, the Women and Equalities Select Committee published a report highlighting gender pay differences and their current and potential effects.
The gender pay gap is often wrongly described as when men and women are paid differently for the same job. This has been prohibited since 1975, and the gender pay gap that is highlighted currently is in regards to the differences in the average pay women and men receive. However, whereas ten years ago the overall UK gap was 25%, it has now fallen to 18.1% according to the Office of National Statistics.
Initially, gender pay gap reporting was voluntary under the “Think Act Report” scheme, but only around 300 organisations signed up and of those only around 11 of those published the requested pay gap information. The incentive has now become compulsory, and it is hoped that employers will be encouraged to analyse why there is a gender pay gap within their organisation and work towards a solution. A ‘Snapshot” is taken on the 5th of April every year (avoiding seasonal fluctuations in the workforce), and bonuses are taken into account.
Figures from the 2015-2016 financial year showed that £44billion was paid out in bonuses and that the majority of senior and high-paying positions are occupied by men. Within the report given by an organisation, the gender distribution in roles within the organisation must be declared in order to assess the distribution and progression of men and women in the workforce.
To ensure clarity and accuracy, the report must be confirmed by a senior employee or officer within the organisation, published on the employer’s website and a copy provided to a digital portal maintained by the Secretary of State within 12 months of the snapshot.
It is expected that organisations may wish to provide context to the report, due to the risk to reputation and media interest.
Since July 2015, there have been two public consultations conducted by the government, each with positive results and informative comments.
The regulations are expected to affect 7,960 employers with around 11 million employees: approximately 34% of the total workforce of the UK. It is estimated that there will be a £3.8 million impact on business, charity and voluntary organisations, with a £2.3 million transition in the first year. The affect on the public sector for compliance and enforcement is expected to be £90,073 per year with a transition cost of £285,073.
After Parliament has approved the regulations, guidance will be published.