Clare Gregory: Grey areas could lead to gender pay gap reporting inconsistencies

Wednesday 5 April 2017 marks the ‘snapshot’ date when organisations with more than 250 employees must collect data to calculate their mean and median gender pay and bonus gaps. Employers will be required to publish this information, with the first comparison due to be published by 4 April 2018 and annually thereafter.

The regulations, despite being prescriptive, leave some grey areas. A number of questions remain unanswered regarding which workers are in scope, what counts as pay, and how bonuses should be treated, notwithstanding Acas and the Government Equalities Office having published guidance.

The report must cover all workers who provide personal services, including full-time employees, zero-hours employees and casual workers. However, what about contractors who supply their services via a service organisation? While the guidance suggests that the contractor would count towards the headcount of the service organisation, there is an argument that they should also count towards the end-user’s.

Similarly, do both the agency and client have to report on agency workers who provide personal services to the client? The key consideration may be to ensure that how workers are categorised here is consistent with employment status strategy elsewhere.

There are also grey areas around pay and bonuses. Overtime is a particularly complicated area: remuneration ‘referable’ to overtime is excluded, which suggests, as confirmed in the final guidance, that employers should exclude all elements of pay earned for overtime. However, the distinction between what is earned during normal working hours and during overtime could be difficult to draw. How should an employer determine which part of a performance bonus or sales commission relates to work done during overtime hours?

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These grey areas will lead to inconsistencies in how employers approach their data. Employers need to be ready to make sure they take a consistent approach internally, so they can track progress year on year.

Clare Gregory is partner, employment and pensions group at law firm DLA Piper