• International Workplace
  • 14 February 2017

Gender pay gap reporting – how to abide by new regulations

New guidance to help large businesses abide by new gender pay gap regulations has been published by ACAS and the Government Equalities Office.

Coming into force in April, gender pay gap reporting is not the same as equal pay. Reporting legislation requires employers with 250 or more employees to publish statutory calculations every year showing how large the pay gap is between their male and female employees. For example, it may show that on average men earn 10% more pay per hour than women, that men earn 5% more in bonuses per year than women, or that the lowest paid quarter of the workforce is mostly female.

ACAS advises that these results must be published on the employer’s own website and a government site. This means that the gender pay gap will be publicly available, including to customers, employees and potential future recruits. As a result, employers should consider taking new or faster actions to reduce or eliminate their gender pay gaps.

Companies that have a smaller pay gap between men and women can reap business benefits such as higher productivity and an enhanced reputation as a fair employer.

Responding to the consultation on draft regulations back in December, the Government commented:

“This government is committed to tackling pay inequality which has existed between men and women for too long. We have made progress in recent years, but know that further progress must be made. That’s why this government is taking bold steps to tackle the gender pay gap – creating opportunities for individuals and employers by promoting greater gender equality in our workplaces.

“Achieving gender equality isn't just the right thing to do, it is vital for our economy too – enhancing performance and nurturing productivity. Although the employment level of women is the highest on record, it has been estimated that further bridging the UK gender gap in work has the potential to create an extra £150bn on top of business-as-usual GDP forecasts in 2025. If we work together to make real progress on this, we will be able to make business environments more accessible for women and advance the economy for the country as a whole.”

Regulations for the private and voluntary sectors have now been approved and will commence from April 2017, from which point employers will have up to 12 months to publish this information. Public sector regulations are subject to the approval of Parliament but are expected to follow the same timescale.

It is estimated that it will take at least another 50 years before average women's pay approaches men's but businesses could do many things to close that gap faster. The ACAS guidance includes:

  • how to monitor gender differences in the recruitment balance, starting salaries, promotions, and flexible working requests across all job types and levels in the hierarchy;
  • how best to promote family-friendly working so women can balance work and parental responsibilities, especially for senior roles; and
  • encouraging men to use flexible working so they share the responsibility of balancing work and a family life.

Gender pay reporting will affect more than 11 million employees across the UK. The new guidance also includes tips on how to calculate the gender pay gap, including:

  • how to correctly count the number of employees for the gender pay gap calculations;
  • how and where a business must publish the data from the gender pay gap; and
  • the penalties if businesses don't comply.