Employment Law Update: Gender Pay Gap Reporting

Employment Law Update: Gender Pay Gap Reporting

27th October, 2018

What has been happening since the new Gender Pay Gap Reporting legislation was introduced?

In recent weeks, the Business, Energy and Industrial Strategy Committee published a report outlining key findings since the implementation of the new legislation surrounding Gender Pay Gap reporting.  
 
This review focused on the adequacy and effectiveness of the requirements introduced by the Government for companies to report their gender pay gaps from April 2018, and on the measures that businesses need to take to reduce and eliminate this gap.
 
There are some key points that were raised within the report which will no doubt be of interest to companies of all sizes.

What were the Committee’s findings?

  • There is a concern that by restricting the qualifying threshold for gender pay gap reporting to 250 employees and above, the analysis available only covers 50% of the UK workforce.
  • The exclusion of the highest paid people in organisations makes a nonsense of efforts to understand the scale of, and reasons behind, the gender pay gap.
  • There is support for further mandatory or voluntary pay reporting linked to other protected characteristics, such as ethnicity and/or disability.
  • Compliance in the new reporting regulations has been good, but the report highlights that changes need to be made; and that at the heart of any change should be the main purpose of the policy: incentivising businesses and other organisations to address their gender pay gaps.

 What are the headline recommendations?

  • That sector representative bodies work with their members and other stakeholders to develop and publicise ambitious and stretching long term targets for reducing gender pay gaps.
  • That company boards introduce Key Performance Indicators for reducing and eliminating their pay gaps
  • That organisations are required to provide some narrative reporting alongside their gender pay statistics and an action plan setting out how pay gaps are being and will be addressed, including objectives and targets.
  • We recommend that the Government consults upon introducing requirements to collect and report pay gap data in respect of disability and ethnicity and, subject to this consultation, introduces this requirement in time for publication in 2020.
  • And the big one - that the qualifying threshold remains at 250 employees next year but be reduced to organisations of 50 employees or more in 2020.

 Our advice?

The report suggests that some employers still do not understand what is required of them under this legislation. It is important to ensure that you are reporting information accurately and that you are ready to provide information within the specified timelines for next year.
 
Keep an eye on the progress in this area and any future changes that may arise, following the headline recommendations of this review.

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