Endeavour Partnership employment solicitor Laura Kirkpatrick delivers some timely advice ahead of impending new Gender Pay Gap regulations…
New Gender Pay Gap regulations that come into force next month are some of the highest profile legal changes of 2017 and will highlight pay differences between men and women.
The Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 will become law from April 6.
The Gender Pay Gap is an equality measure that shows the difference in average earnings between men and women over a period of time, no matter what their role is.
In the UK, the average pay for men is greater than it is for women and although at its lowest since 1997, the Gender Pay Gap between men and women is currently at 18.1%, according to latest figures from the Office of National Statistics.
In 2015 the Government vowed to close the Gender Pay Gap and have consulted with businesses on how to do this.
This has led to the new Gender Pay Gap regulations which means companies with over 250 employees will have to openly report the following:
• Gender pay gap (mean and median averages)
• Gender bonus gap (mean and median averages)
• Proportion of men and women receiving bonuses
• Proportion of men and women in each quartile of the organisation’s pay structure
Failing to comply with the new laws and publish this information may result in a business being publicly ‘named and shamed’, meaning customers, employees and potential future recruits could raise concerns with the business’s support for improving gender equality.
In some cases, the Equality and Human Rights Commission may use its enforcement powers to take action.
These new regulations form an important step towards improving gender equality within the workplace and given that thousands of employers could be affected, it’s likely to have an impact.
The new rules will oblige employers to highlight any differences in pay between men and women and public pressure could encourage a business to look at their pay structures.
As with the introduction of any new law, there’s often some confusion around how it’ll work in practice for businesses and organisations so we’re assisting companies now to keep them fully informed of their obligations in light of the new regulations.
Although there are no sanctions for non-compliance at the moment, in the future, fines could be invoked. But companies need to be aware of the indirect effects non-compliance could have. For example, an organisation’s reputation, goodwill and share price could all be adversely affected by a lack of reported information or a large gender pay gap.
In addition, they could experience difficulties recruiting and retaining employees or securing new contracts.
Our advice to businesses is they should be taking steps now so that they are ready to start collecting April 2017 data.
Planning ahead will also give a company the ability to provide a narrative with its data which can explain the reasons for the results and give details about actions that are being taken to reduce or eliminate the Gender Pay Gap.
In addition, businesses with less than 250 employees are being advised to be aware of the new laws as the Government has already looked at whether the regulations should be extended to all businesses and with the increased publicity around the gender pay gap and equal pay issues, employers should now review gender equality within their business and take steps to reduce or eliminate their gender pay gap.