06 July 2015 #Employment
The government has confirmed that a consultation will be launched in the coming weeks, with a view to making regulations under section 78 of the Equality Act 2010 (EqA 2010) to implement gender pay gap reporting.
It has also established a business reference group to inform any proposals and intends to tackle employers' concerns over publishing gender pay information and other issues during the consultation.
Section 78 of the EqA 2010 contains a power for the government to make regulations requiring employers with at least 250 employees to publish information relating to differences between their male and female employees’ pay. This in turn gave rise to the insertion of section 147 in the Small Business, Enterprise and Employment Act 2015, which requires regulations under section 78 of the EqA 2010 to be made within 12 months of the Act coming into force.
It is anticipated that companies will be required to carry out an equal pay review and publish on an annual basis, as a minimum, the gender pay gap for full-time and part-time staff and the overall pay gap.
It is possible that companies may also be required to publish details of the difference between men’s and women’s starting salaries, average basic pay, other elements of reward (such as bonuses) and average total earnings broken down by grade and job type.
The proposed penalty for non-compliance is a fine of up to £5,000. However, the associated negative publicity and employment relations risks would likely be far more damaging.