Private and voluntary sector employers with 250 or more employees will be required to publish gender pay gap information by 4 April 2018 and annually thereafter.
In February 2016, the government consulted on draft Gender Pay Gap Reporting (GPGR) regulations. Several concerns were expressed about the initial draft, particularly around the definitions of pay and bonus pay, and there was confusion over what pay “quartiles” were to be used; giving lawyers maths is never a good idea!
The final version of the draft Equality Act 2010 (Gender Pay Gap Information) Regulations 2017, which were initially promised during “the summer”, was finally published on 6 December 2016. Subject to parliamentary approval, the Regulations are expected to come into force on 6 April 2017.
Although the publication deadline for the first GPGR report is some way off, the report must be based on pay data as at 5 April 2017, including bonuses paid within the 12 month period ending on 5 April 2017.
While the core obligations on employers are largely unchanged in the final version, there are several changes to the detail. On the plus side, the government does appear to have taken on board many of the concerns raised about previous ambiguities. However, employers who have already made headway with their reporting plans, based on the original draft, will need to check that their methodology is in line with the new, highly prescriptive requirements.
Key differences between the draft and final regulations
The headline changes to the draft GPGR include:
- New snapshot date of 5 April 2017, and first reporting deadline of 4 April 2018.
- Extended to cover employees, apprentices or those contracted personally to do work (“workers”).
- Relevant employees for both pay and bonus pay figures must be employed on 5 April 2017.
- A new concept of “full-pay relevant employee”, which for the purposes of calculating pay gap figures removes those on leave and paid at reduced or nil pay. There are also tweaks to the definition of “ordinary pay” and “bonus pay”. Clarification around bonuses paid via securities and when such remuneration is treated as paid is particularly welcome.
- A new six-step process for working out the “hourly rate of pay” for comparison purposes.
- Clarification that pay quartiles calculated by dividing the workforce into four equal sized groups, after ranking employees in terms of pay, as opposed to dividing the overall pay distribution into four equal proportions.
This quick reference chart highlights all the key changes between the draft and final regulations.
