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Compulsory gender pay reporting on its way

February 26, 2016
Debt Collection

As you may have heard, the Government Equalities Office recently confirmed that it intends to bring new laws into force this October that will require businesses with 250 or more employees to publish statistics on their gender pay gap.  

Why is the Government doing this?

For decades now, we have had laws requiring employers to pay men and women the same pay for undertaking the same or similar work.  Yet despite these laws, the gap between pay rates for men and women remains stubbornly high.  Many would argue that there are various and complicated reasons why women tend to get paid less than men.  It is by no means the case that an employer is acting unlawfully simply because its female workers happen to earn less than its male ones.  After all, they may be performing different functions.  However, by calculating an individual employer’s gender pay gap, as well as the distribution of female workers across the various echelons of the business, we can begin to identify particular patterns or indeed problems - a ‘glass ceiling’ perhaps?  Once these problems have been identified, presumably we are one step closer to devising a strategy to solve them.

So what will employers need to do?

On an annual basis, starting in April 2017, affected employers will need to calculate their mean and median hourly rates of pay for both men and women.  They will then have to work out the ‘gap’ between these rates of pay and publish this information on their website.  In addition, they will be required to publish statistics on the distribution of men and women across the various pay grades within the company, as well as information about the bonuses paid to the respective genders.

Employers will have a year in which to ‘number crunch’ the figures and get the data onto their website.  This means that employers will not be required to begin publishing their ‘vital statistics’ until April 2018.

What happens if employers don’t play ball?  

Interestingly, businesses that fail to comply with the new laws will be at risk of being publically ‘named and shamed’.  However, it would appear that, for now, they will face no other sanction (whether financial or otherwise).  

So what now?

Despite the lack of any real ‘stick’ with which to beat employers who don’t do what they should, if you have 250 or more employees, you really ought to be taking steps to work out how you will comply with the new laws.  Indeed, some employers will want to get in early and ‘measure’ their gender pay gap now.  The advantage of doing this is that you can identify any problems and tackle them before you have to publish your data to the wider world.

The Government’s proposal are currently subject to consultation.  If you want to have your say on them, you can go to https://www.gov.uk/government/consultations/mandatory-gender-pay-gap-reporting 

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