Government publishes final draft regulations on gender pay gap reporting

government whitehall 430

The government has published the final draft regulations for the gender pay gap reporting requirements due to come into effect in April 2017.

The regulations will require organisations with 250 or more employees to publish gender pay gap and bonus data.

A consultation seeking views on the details of the draft legislation for mandatory gender pay gap reporting ran between 12 February and 11 March 2016.

The regulations require employers to publish the difference between the mean hourly rate of pay and the median hourly rate of pay for male and female full-time employees; the difference between the mean bonus pay and median bonus pay for male and female employees; the proportions of male and female employees who were awarded bonus pay; and the proportions of male and female full-time employees in the lower, lower middle, upper middle and upper quartile pay bands.

This information must be published within the 12 months following the designated snapshot date of 5 April each year.

Employers will be required to publish the information and a written statement confirming its accuracy on their website. These must be accessible to employees and the public for at least three years from the date of publication.

Clare Gregory, partner in employment law at DLA Piper, said: “During the long wait [for the regulations], there has been much speculation, combined with no small amount of hope, that the final obligations on employers would be much less complex and confusing than outlined in the initial draft regulations. To a small extent the government has addressed some of the concerns, for example there is much-needed clarification over how to calculate the quartile pay bands, which will contain the proportions of male and female employees in each band, ranked from lowest paid to highest paid.

“However, the bottom line is that employers are likely to still be left scratching their heads in their quest to identify how to calculate the difference between both the mean and median rates of pay for male and female employees, the difference between the mean and median bonus pay and the proportions of male and female employees who have been paid bonus pay.

“But time is of the essence, and employers will need to make rapid progress in getting to grips with their obligations.¬†Despite the delay in publication of the regulations, the date on which the pay snapshot must be taken has actually moved forward from 30 April to 5 April. Employers must publish a report within 12 months of that date on their website.

“And, for the first time, there is a suggestion in the Explanatory Notes to the regulations that a failure to comply with the regulations will be an ‘unlawful act’ which will empower the Equality and Human Rights Commission to take enforcement action. This means that reputational issues may not be the only issue employers need to be concerned with if they do not meet their obligations in full.”