Draft guidance published on private and voluntary sector gender pay gap reporting

This has clearly been a gender pay gap week for government lawyers. Not only have we had the publication of the draft public sector gender pay gap regulations (here), but we have also had the draft guidance from the government and ACAS published on gender pay gap reporting for the private and voluntary sectors (found here).

As I think everyone is aware by now, the gender pay gap regulations require employers with at least 250 employees to calculate and report the difference between men and women's average hourly pay. The guidance has a series of questions and answers about who exactly is covered by the regulations and in particular confirms points on part-time workers, job shares, partners and overseas workers. Predictably overseas workers have the least definitive information which reflects the current case law on whether an employee is subject to UK employment law; uncertain cases are likely to be fact specific.

The guidance then goes on to explain how gender pay reporting should be carried out. It suggests five stages:

1. Extract the essential information – identify all relevant employees, establish their gender and level of pay (including bonuses) and weekly working hours. Then calculate the hourly pay for relevant employees.

2. Carry out the calculations – to work out the mean and median pay (with reminders of what mean and median are and why they are useful in this exercise) and what the mean and median gender pay gap is for each organisation. There are detailed worked examples of how to do this.

3. Make a supporting statement – to confirm the minimum requirement that the information is accurate. The guidance encourages a voluntary supporting narrative for example to aid understanding, explain what measures have been taken and the timeframe for impact or reporting a pay gap reduction.

4. Publish the gender pay information – this must be on an accessible part of the organisations own website and on a designated government website (details of which will be provided at a later date).

5. Implement plans to manage the gender pay gap – although this last step is not a legal requirement, it is considered best practice and examples are given as to why and how organisations should try to reduce the gender pay gap.

The guidance confirms the details provided in the draft regulations (due to be brought into force on 6 April 2017) in which Eleanor Rowswell covered in her blog, and puts a little more flesh on the bones with worked examples.

In my view, there is nothing new in this guidance and inevitably there will be cases of complex remuneration structures and/or international workforces where this guidance is not enough and additional advice will be needed to clarify exactly what, when and how those employees should be covered.

Of course, these sorts of guides are never perfect and cannot cater for every situation. Overall, it does provide some clear worked examples of how to make the calculations and some background information and statistics as to why closing the gender pay gap is a good idea (which I agree it is). It remains to be seen how useful organisations will find this when applying it to their own people and sums but I would encourage anyone who is involved in the gender pay gap calculations to read this guidance thoroughly as a starting point.

To read up on previous discussions of this topic, take a look at Claudia and Alice's posts from 2016.