The introduction of gender pay reporting in April 2017 may seem far off, but organisations need to start prioritising this now. Here we give you a summary of the information you need to know about the forthcoming regulations.
What is gender pay reporting?
Last year the Government announced plans to introduce mandatory gender pay reporting for employers with more than 250 employees. In the first instance, reporting was thought to be confined to the private sector only but last month Justine Greening (Minister for Women and Equalities) confirmed that the regulations would also apply to the public sector; which was already subject to the Public Sector Equality Duty. Therefore if you are in the public or the private sector and your organisation has more than 250 employees; from 1st April 2017, it will be a mandatory requirement for you to publish details of your organisation’s gender pay gap on your website and a government website.
What is the current gender pay gap?
Research shows that the current gender pay gap is about 25.3% in the private sector and 18.5% in the public sector and that by widening the regulations to include the public sector will bring within the regulations another 3.8m workers
What is the background?
Equal pay for equal work or work of equal value has been part of law since the Equal Pay Act was introduced in 1970. However the latest ONS Annual Survey of Hours and Earnings identified the gender pay gap for median earnings at 19.2% and this percentage has remained unchanged since 2014. This illustrates that equality still hasn’t been reached and isn’t declining; surprising given the date of the legislation. The Trades Union Congress (TUC) estimated a 47 year period at this rate for the UK to reach gender pay equality. The government’s aim in introducing this process is to increase transparency around the differences in pay between men and women.
It’s proposed that organisations failing to address gender pay inequalities will be highlighted in league tables ranked by sector, which is intended to drive improvements. In addition, the Equality and Human Rights Commission (EHRC) will have the power to take court proceedings against those in the public sector for failing to comply. The general idea is that this will motivate organisations into increasing women’s pay and reducing any gender pay gap.
Are housing providers in the public or private sectors?
As we know, last autumn the ONS reclassified the housing association sector as being within the public sector. Over the last 10 months, the sector has changed its approach to regulation to help convince the ONS that housing associations are in fact in the private sector. Last month’s announcement has made that debate academic so far as gender pay reporting is concerned. The regulations will apply equally to both public and private sectors regardless of the view of the ONS.
What information does my organisation need to publish?
Employers need to take a snap shot of their pay data by 1st April 2017. Organisations have to publish on their website (and a government website) details of:
- % difference in mean pay
- % difference in median pay
- % difference in bonuses
- Proportion of men and women who receive bonuses
- Gender pay split breakdown between quartile pay bands (e.g. 25%, 50%, 75%, 100%)
This information must be published by no later than 30th April 2018 and must remain accessible for up to three years.
What are the advantages and disadvantages?
The obvious advantages are seeing a reduction in gender pay gaps across all sectors. It also ensures that organisations facilitate fair, appropriate and best practice approaches to remuneration and benefits.
Should organisations not comply with the regulations, or if they identify a significant gender pay gap; the potential impacts of publishing this information should be considered:
- Challenges with recruitment/attraction
- Difficulties retaining existing employees
- Having to provide the data as part of tender opportunities
- Having to provide the data as part of accreditation assessments (such as Investors in People)
- Detriment to employee engagement/satisfaction
- Equal pay claims
- Damage to company reputation
- Media exposure
- Impact to union relationships
- Court action on the part of the EHRC
Is there anything else I should know?
Staff on sick leave, maternity or paternity leave, part time hours will be included within the reporting.
The regulations are in draft and a final version is yet to be published, so further changes or amendments could occur. The delay in publishing means housing associations have less time to prepare.
Where can I get assistance?
It’s not too late to start considering what your equal pay gap looks like. In advance of April 2017, Housing Associations will have just over 6 months to prepare and take action.
Altair provides a Gender Pay Reporting Audit service; identifying any gender pay gaps and providing bespoke recommendations designed to reduce gaps. Our team at Altair are uniquely placed with specialists in employment law, and reward and remuneration .
Altair provides HR consultancy services for housing sector clients across the UK and Ireland.