April 5, 2017
From April 2017, employers with over 250 employees will be required to reveal specific information about the difference in net pay and bonuses between male and female employees explain the legal experts from Berg. The Office for National Statistics revealed that, in the financial industry, male managers and directors are earning on average 32.4% more than women in the same role. Whilst the statistic will vary from industry to industry, it’s important to highlight the divide and work together to accomplish equality in the workplace. The Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 comes into force on 6th April 2017, and will require businesses to be transparent about the gender equality in their workplaces. It is hoped that this important move will encourage any business with less than positive statistics to make the move towards creating an equal workplace. For businesses that will need to report on their net pay, it’s a big task that needs to be executed properly. In fact, a survey by NGA Human Resources found that 20% of respondents won’t be ready to disclose the information by the deadline. With that in mind, here’s a look into what the regulations require you to do, and how these changes could impact your business.
Businesses will need to collect a ‘snapshot’ of data on 5th April 2017. However, this data does not need to be immediately reported on – businesses will have until 4th April 2018 to do this, and the cycle of collecting and reporting will continue annually.
This data must be published on the employer’s website for at least 3 years, alongside being published on a designated government website.
What needs to be provided
There are six calculations that affected businesses will have to provide:
- Average gender pay gap as a mean average
- Average gender pay gap as a median average
- Average bonus gender pay gap as a mean average
- Average bonus gender pay gap as a median average
- Proportion of males receiving a bonus payment and proportion of females receiving a bonus payment
- Proportion of males and females in each pay band ordered from lowest to highest pay
There is no legal requirement for businesses to explain the numbers; it is simply up to each company to determine whether to say something about the data. You will need to provide a written statement signed by an appropriate senior, such as a director or Chief Executive, which confirms the calculations are accurate.
If the results show a clear gender divide, it would be advisable to provide commentary on how you are going to rectify the divide. If you are going to explain your results, it is recommended that you pre-plan a response once you are aware of the outcome. Staff should be advised and spoken to about the results before they are made public, with a thorough action plan detailing any changes you will be making.
How will the gender pay gap affect your business?
Regardless of the results, the government is not looking to name and shame any employers who have a clear gender pay divide. However, failure to report on the data could result in the Equality and Human Rights Commission taking action, whilst it could also cast a shadow of doubt as to why you have failed to do so.
The intentions of the report are to make businesses more transparent about their gender divide, and to help these businesses make progressive changes accordingly. By making positive changes to the way you work, you will be able to create a positive and equal environment for every member of staff.
To learn more about how the gender pay gap legislation will have an impact on your business, take a read of berg’s gender pay gap report, which has been created to help assist you in the regulations and rollout of the legislation.