The final gender pay gap regulations have been published - but what's changed?
The Equality Act 2010 (Gender Pay Gap Information) Regulations ('the regulations') have been published, together with a draft Explanatory Memorandum. Public sector organisations are outside the scope of the regulations for the time being, but the government has announced that it intends to introduce an equivalent scheme for the public sector, mirroring the same requirements and timescales - so it is worth public sector employers getting to grips with these draft regulations and the changes now. Employers now have certainty over what the final scheme looks like. Any employer caught by the regulations (i.e. with over 250 employees) needs to start preparing now for pay reporting.
- median and mean gender pay gap figures (including bonuses);
- the percentage of men and the percentage of women who received bonuses;
- the number of men and the number of women in each 'pay quartile'.
Broadly, the final draft regulations follow the same requirements as the original scheme, but there are a number of important changes to note.
There are no financial penalties for failing to report, but non-compliance may be investigated by the Equality and Human Rights Commission (EHRC).
If an organisation's report shows a gender pay gap, there is no specific fine or other penalty, or any specific power for the EHRC to investigate. However, this information may be utilised by employees seeking to bring equal pay or sex discrimination claims. Remember that any internal discussions regarding a pay gap would be disclosable in any subsequent proceedings, so it may be wise to include your internal or external legal advisors in any communications and meetings in order to take advantage of legal professional privilege.
Another point to remember is that it is possible to provide a narrative alongside the statistics, which may explain any differentials – for example, if a high proportion of female employees were on maternity leave that year and their bonuses were lower as a result (reduced bonuses must still be included in figures; the 'full pay' requirement does not apply to bonuses).
Although the regulations are still in draft and will not come into force until they have been subject to Parliamentary scrutiny, it is highly unlikely that there will be any further changes. Therefore, preparations can commence on the basis of the current draft. Prudent employers will be gathering data in advance of the 'snapshot' date, to ensure the data can be obtained and to consider how to deal with any early indication of a significant pay gap.
Supporting non-statutory guidance has been promised after Parliament has approved the regulations. Acas has also indicated that it will be producing guidance early in 2017.
Bevan Brittan has contributed to the government's consultation on the draft regulations and has been advising clients on preparing for reporting and dealing with any issues. Please do contact me, or your usual Bevan Brittan contact if you would like a quote for a detailed briefing on this topic or advice on specific gender pay issues.