17 July 2015 #Employment
This week’s other big news on the employment front has been the Government’s launch of a consultation on legislation on gender pay gap reporting. This will close on 6 September 2015.
The former Coalition Government legislated for gender pay gap reporting just before the election, requiring new regulations within 12 months. The Government has now confirmed that it will legislate under S.78 of the Equality Act 2010 to require companies with 250 or more employees to publish gender pay gap information.
The consultation document, ‘Closing the Gender Pay Gap’, states that the new regulations will require private and voluntary sectors in Great Britain with at least 250 employees to publish information about the pay of their male and female employees to show whether there are differences in the pay or male and female employees.
The consultation seeks views on the level of detail of gender pay gap information that should be required. It asks whether the information should be the overall difference between the average earnings of men and women as a percentage of men's earnings, or whether it should be broken down by full-time and part-time employees, or by grade or job type. It also asks whether employers should be required to provide additional, contextual information, explaining any pay gaps and setting out what remedial action they intend to take; and how often employers should be required to publish such information. Under S.78 Equality Act, the information can be required to be published annually at most.
The consultation paper reminds us that addressing the gender pay gap is more than dealing with unequal pay between men and women for the same or equivalent work, which has been subject to legislation for over 40 years. The gender pay gap shows the difference between the average earnings of men and women as a percentage of men’s earnings. The overall UK gender pay gap is 19.1 %.
Interestingly, the gender pay gap for full-time employees is much lower at 9.4% and the gender pay gap for part-time employees is -5.5.%. This demonstrates not only how many more women that men work part-time but part-time work attracts less pay than full -time work.
The consultation also seeks to identify some of the causes of the overall gender pay gap, including the concentration of women in sectors that are less well paid, the longer term effect of part-time working and issues in progressing up the career ladder. Plus, it points out that many companies already calculate their pay gaps, albeit in different ways. The Office for National Statistics currently uses median hourly earnings excluding overtime.
The consultation closes on 6 September 2015. The regulations are expected to be made in the first half of 2016, although implementation may be delayed to give businesses time to prepare. Please let us know if you would like us to help you input into the consultation which can be found here.
Clearly, there will be a lot of detail to follow when it comes to the draft regulations. In the meantime, regardless of the number of employees your organisation has, now is a good time to consider an equal pay audit. To find out more about conducting an equal pay audit and making use of equal pay audit toolkits contact us at email@example.com or firstname.lastname@example.org