Legal briefing | Employment | 11 Mar 2019

What do your April 2018 gender pay gap figures look like?

Overview

2019 brings with it the second round of gender pay gap reporting figures. The statistics for those firms who have already published their April 2018 figures show that approximately 40% have reported a widening of the gap from the previous year. In response, the Government Equalities Office said, "Closing the gender pay gap is not a quick fix, and employers may take time to see their gap close as they implement long term action plans".

What are the reporting requirements?

Under the regulations, UK employers with 250 or more employees will be required to publish annually:

  • the overall mean (average) and median (mid-point in the data) difference between male and female pay across their workforce
  • the proportion of male and female employees who were paid bonuses or other incentives during the relevant year
  • the mean and median difference between bonuses and incentive payments for male and female employees, and
  • the proportion of male and female employees in each quartile of the workforce.

In this context, employees include workers, apprentices and also some consultants, if they have a contract to do work personally.

The information must be published on the employer's website annually and remain there for at least three years. The information must also be accompanied by a written statement, signed by a director, confirming that it is accurate. In scope employers will also have to submit evidence of compliance to the government by uploading the data to the government-sponsored website (see https://gender-pay-gap.service.gov.uk/).

Whilst not a requirement, many employers will also want to include a narrative along with the figures, to provide some context, and the government is encouraging this. The vast majority of our clients who were required to publish their gender pay gap figures by 4 April 2018 included a detailed narrative with their submissions which have the dual effect of explaining the reasons behind the figures both internally to staff and externally to the general public. We anticipate that this will very much be the same for this year's figures especially where the figures show a widening gap that requires explanation.

Gender Pay Gap Reporting

UK employers with 250 or more employees are required to publish various figures to show the gender pay gap in their workforce.

This reporting requirement was introduced from 6 April 2017 under the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 and so the second round of figures (based on data on 5 April 2018) is due to be reported by 4 April 2019.

When must employers report?

The key date is 5 April each year – employers will have 12 months from 5 April each year to publish the information in respect of the previous year. The next reports in respect of April 2018 are therefore due no later than 4 April 2019.

What if an employer fails to report?

Employers who fail to report may be 'named and shamed' and the Equality and Human Rights Commission will have the power to take enforcement action. We understand that the Equality and Human Rights Commission is investigating companies that failed to report by the 4 April 2018 deadline and will consider enforcement action against them.

What should employers be doing now?

In scope employers should be looking at their pay data to determine their pay gaps now and what narrative should be prepared to accompany the data. For those businesses who were caught by the regime and published their 5 April 2017 gender pay gap data they should be looking at whether the gap has widened or narrowed since that data was published so that they can consider the impact this will have on the narrative for this year's figures.

Considering this now in advance of the deadline gives an opportunity to consider carefully the messages that the pay gap data and accompanying narrative sends out. Employers may also wish to consider involving internal or external lawyers so that the analysis is privileged.

How can we help?

We are working with a number of our clients on projects in relation to this year's round of reporting requirements, including:

  • analysing how the reporting requirement will apply to their business this year and how the figures will be calculated
  • considering what narrative might accompany the figures, to help explain any gaps identified and measures taken to address them including explanations of annual changes from the last published data
  • identifying where pay discrepancies might exist and flagging areas where the organisation might be vulnerable to equal pay claims, and
  • considering how to address any pay discrepancies and what measures might be put in place to help reduce the gender pay gap over time.

If you would like to discuss how the gender pay gap reporting requirements will affect your business, please contact any of the Employment Partners below. 

For further information, please contact