Employers across the UK will now be required to publish the pay difference between male and female employees, following a new legislation.
The new legislation applies to businesses, public sector bodies and charities with 250 or more employees and each organisation will be required to publish an annual report on the hourly rate and bonuses paid to all employees.
The government has set out methods of calculation for the recording and publishing of the pay data. The data must be calculated at a specific ‘snapshot date’ which is the 31st March for public sector organisations and the 5th April for businesses and charities. Employers must then publish the pay data within a year of the snapshot date.
The following six pieces of information should be submitted to the Secretary of State via a government sponsored website and be displayed on each individual company website for the public to see.
- The difference between the mean hourly rate of pay for full-pay male and full-pay female employees
- The difference between the median hourly rate for pay for full-pay male and full-pay female employees
- The difference between the mean bonus pay paid to male relevant employees and that paid to female employees
- The difference between the median bonus pay paid to male relevant employees and that paid to female relevant employees
- The proportions of male and female relevant employees who were paid bonus pay; and
- The proportion of male and female full-pay relevant employees in the lower, lower middle, upper middle and upper quartile pay bands
Employees who are paid a reduced rate because of annual, maternity, shared parental, sick or special leave are specifically excluded, to prevent the statistics from being distorted.
Organisations with fewer than 250 employees can choose to voluntarily publish and report the pay data but have no obligation to do so.
DTM Legal associate and employment law specialist, Tom Evans, said: “Employers who have not yet started to think about gender pay gap reporting need to act quickly as there’s not much time left. The year-long count down has begun and gender pay data taken from the 5th April 2017 will need to be submitted by the 4th April 2018.
“The first practical step employers should take is to calculate their total number of employees to identify if the legislation applies to their organisation. Employers do need to be careful as this extends to; people who have a contract of employment, agency workers (those with a contract to do work or provide services) and some self-employed people (where they must personally perform the work).
“The data should be based on ordinary pay which includes, basic pay, allowances and pay for annual leave. Overtime, pay in lieu of annual leave, benefits in kind and payments relating to the termination of employment are excluded and each annual submission needs to be accompanied by a written statement by a senior responsible person like a director or partner, confirming that the data being published is accurate.
“Employers need to get an internal and external communications plan in place before they publish the data. If there are known disparities, employers should consider why these exist so they can manage and present the information in a meaningful context.
“Overall, this is good news for the UK. Employers who pay their employees equally have nothing to be concerned about and the law will help paint a clearer picture of equal pay in the public and private sector and help identify the worst performing employers. If an organisation does not comply with the new regulations, it could be prosecuted by The Equality and Human Rights Commission.”
DTM Legal’s proactive approach dramatically reduces the risk of employee disputes, potential industrial tribunal cases and other contentious issues for your business.
To find out how we can help you and your business with new legislation, speak to Tom Evans on 0151 230 1217 or email tom.evans@dtmlegal.com.
