Are you ready for Gender Pay Gap Reporting?
SSF Business Consulting
Are you one of the employers that are delaying publishing your Gender Pay Report? Is that because you want to make sure you get it right or are you worried that you’ll get it wrong?
There has been a lot of debate about the Gender Pay Gap and recently this has been highlighted in the media with some high-profile cases including BBC News presenters and reporters and well know actors and celebrities amongst others.
I was also recently at an event celebrating International Women’s Day at which there was further talk about the Gender Pay Gap; so, whilst it’s great that there is a lot of debate about the subject it is also quite saddening to see that in 2018 there is still such significant inequity resulting in a legal obligation for companies to report on their Gender Pay Gap.
A positive message from the International Women’s Day event that I attended earlier this month, was that were almost the same number of male attendees as females; which I personally was pleased to see. Hopefully this means that businesses are actively taking measures to reduce the Gender Pay Gap but only time will tell as reporting progresses.
Reporting Gender Pay Gaps should focus businesses and maybe it will mean that employers will take action to review what they are doing to reduce the gap. With less than a month to go before Companies with a “headcount” of 250 or more employees are required to publish their Gender Pay Gap Reports, if you haven’t already started, you will have a big task ahead of you!
1) What does this mean for employers?
From 5th April 2018 you must comply with the Gender Pay Gap Reporting regulations for any year where employers have a ‘headcount’ of 250 or more employees on the “snapshot” date of April 5th. There is a common misconception that the Gender Pay Gap refers to equal pay for equal value, however, this is not the case as Equal Pay rights have been a legal requirement since the 1970’s.
a)The Gender Pay Gap refers to the average percentage difference between each quartile of an organisation’s pay structure.
b) If after initial reporting has commenced and during any given year; where you have a headcount of less than 250, it would be wise to continue to continue with Gender Pay Gap reporting as best practice.
c) To ensure that employers comply with Gender Pay Gap Regulations, employers will be required to publish their Gender Pay Gap reports on their own website and also on a Government website annually.
2) How to prepare for your Gender Pay Gap Report?
There are six key calculations that employers need to report on and you will be surprised how long it takes to gather the information the first time that you need to do this. After the first year of collating information providing you have an effective process to maintain this; it will be easier next time.
a) What do employers need to calculate?
You need to calculate the mean and median gender pay gap; bonus gender pay gap; the proportion of males and females receiving a bonus payment; and the proportion of males and females in each quartile band.
b) Who needs to sign off the Gender Pay Gap Report?
A Company Director or someone at that same level in your business, is legally required to sign off and publish your pay gap data on a dedicated government website.
c) How often do you need to do this in order to ensure that you are compliant?
The calculations must be published for every year that you have 250 employees or more based on the “snapshot” date of 5th April.
d) What if a company does not have a website?
Eligible employers are legally obliged to publish information about their gender pay gap on a government website and on "the employer's website". The Regulations do not anticipate that employers may not have their own website. The Government has indicated that there was no requirement for the website to be a UK website; or an employer "may want to create a separate webpage just for its gender pay gap information or publish on a parent company website.
3. How to avoid the pitfalls?
There are some additional stumbling blocks which have been reported following some early submissions that employers should be aware of:
a) Absent Employees – Absent employees still need to be included for Gender Pay If you have any part time employees they each still count as a whole employee and this does not mean you should exclude part-time employees.
b) Bonus Calculations – Bonus calculations are potentially a critical point of failure so you will need to consider factors such as Absent Employees and exactly what constitutes a bonus.
c) Calculations of Average Working Hours – You must include all employees regardless of their contracted hours (including “zero hours”) and calculate the employee’s average working hours over a 12-week reference period.
d) How should Companies that are part of a Group be treated? – There is a legal obligation for each legal entity with 250 or more employees to publish their Gender Pay Report separately.
e) How should employers treat Transgender, non-binary or gender fluid employees? - Employers should use the gender identification that they have on record for their employees and being sensitive personal data so must be treated confidentially.
f) What is the Penalty for non-compliance? – Although the Regulations are not specific about penalties for failure to publish gender pay gap data, failure to do so is unlawful. It is likely that there will be formal investigations, fines imposed and potentially further legal sanctions but this is yet to be confirmed. Ultimately this could result in reputational damage.
3) What are the Next Steps and how can we help you to do this?
Whilst Gender Pay Gap Reporting is a legal obligation; that doesn’t mean that this is all we should be doing. Simply reporting on the Gender Pay Gap does not resolve the inequality, the real success will be measured by what steps are taken towards closing the Gender Pay Gap?
a) There are some practical steps that employers can take now to start to make a difference such as Pay Audits, Salary Benchmarking, more robust Diversity and Inclusion policies etc.
b) Whilst it is great to see that Gender Pay Gap is still very topical in the workplace, and in the Media, without practical measure and positive action from employers, simply reporting the facts will not be enough to make a difference.
Clearly the first step for you is to start and continue to report on your Gender Pay Gap, which may be more time-consuming that you are prepared for.
We can help you to avoid the pitfalls and continue to have the time to do what you do best!
Avoid wasting your time and money, not to mention the stress and penalties of getting it wrong; by being more proactive and being prepared.
As a strong Business Partner, SSF Business Consulting have partnered with many Clients to avoid legal action and to mitigate any risks of getting things wrong due to non-compliance of their statutory obligations.