With gender pay gap reporting obligations about to come into force, we set out below our answers to some frequently asked questions on the topic.

With gender pay gap reporting obligations about to come into force, we set out below our answers to some frequently asked questions on the topic.

To which employers does reporting apply?

Those with 250 or more employees on 5 April 2017.

Is that 250 employees across a whole group of companies or within a single company?

It is 250 employees per company, not over a group of companies.

Do we count contractors, temps and agency staff?

Anyone who contracts personally to do work with you should be counted, unless the person is genuinely self-employed. This is similar to the ‘worker’ definition in employment law. This would likely mean that at least some temps, casual workers and contractors will be included in the calculation.

Agency staff should not be included in the calculation.

What about our employees based outside the UK?

ACAS suggests that any employee who could bring a claim in the Employment Tribunal under the Equality Act should be counted for gender pay gap reporting purposes. ACAS acknowledges that this is a complex area of law, and each case should be considered on its own merits.

We are covered by these regulations. What do we have to report?

The regulations require employers to publish gender pay information in five categories:

• The mean average hourly pay of men and women in the organisation
• The median average hourly pay of men and women in the organisation
• The proportion of men and women in each of four pay bands
• Mean and median bonus pay of men and women
• The proportion of men and women who receive a bonus

Bear in mind that making the calculations above is very complicated, and we recommend that you seek professional advice before doing so.

What counts as pay?

This is complex and each element of pay needs to be checked to determine whether it should or should not be included in gender pay calculations. Key elements are as follows:

• Do include – basic pay, allowances, bonuses, shift premiums
• Do not include – overtime pay, expenses, benefits in kind, and the value of salary sacrifice schemes

What counts as bonus pay?

Again, this is complex, but bonus pay broadly means payment relating to profit share, productivity, performance, incentive or commission. Payment does not necessarily need to be in money – it can, for example, include shares or other securities.

So we have to include bonuses in two separate calculations?

Yes. Bonus pay needs to be included in your calculation of the overall gender pay gap and also in the gender bonus pay gap.

Over what period do I make our calculations?

The key date is 5 April. If your employees are monthly paid, the pay data for the monthly pay period in which 5 April falls should be used. Similarly, for weekly paid employees, pay data for the weekly pay period in which 5 April falls should be used.

When do we have to publish our report?

Employers are required to identify whether they are covered by the regulations each April. If they are covered by the regulations, employers have 12 months to publish their gender pay gap report.

Where should we publish our report?

The gender pay gap report should be published on your website and should remain on your website for three years. The report should also be provided to the Government via a specified website, which should be made available shortly.

What happens if we don’t comply?

Surprisingly, for a much-heralded and complex piece of legislation, not very much. There is no enforcement provision in the Regulations. The Government is considering the creation of a publicly accessible database of compliant employers, but there is no suggestion of a ‘name and shame’ campaign of non-compliant employers, like that for those who fail to comply with the minimum wage legislation.

Do bear in mind, though, the reputational risk of failing to comply. Inevitably, suspicion that a substantial pay gap is being hidden will fall on employers who fail to publish the required information. Also remember that the Equality and Human Rights Commission is tasked with ensuring compliance with the Regulations, so non-compliant employers should not be surprised if the EHRC investigates their practices.

Client Alert 2017-064