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Gender pay gap rules under fire

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New gender pay gap rules will not capture the full picture

New rules requiring employers to report on their gender pay gaps will not solve equal pay problems.



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The Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 come into force today (6 April 2017).

They require employers to publish pay data to demonstrate the overall pay gap in their workforce for each year and apply to all private and voluntary sector employers in Great Britain with 250 or more employees.

Prospect believes that the duty on gender pay gap reporting should apply to all employers and that reporting by job, grade and pay band should be included. The lack of requirement to report on part-time/full-time differentials is likely to obscure essential data.

Pay data

Employers must must collect and publish the following information:

  • the difference between average hourly rates of pay for women and men
  • the difference between average bonuses for women and men
  • the proportions of women and men who were paid bonus pay
  • the proportions of women and men in each quartile of the overall pay range.

For average figures, employers must provide the mean and medium averages.

The regulations exclude those on reduced or nil pay during maternity, parental or sick leave. But part-time and fixed-term contract workers must be included in the data.

The figures must be calculated on the basis of 'ordinary' pay, which includes basic pay, allowances and shift premium pay – but not overtime pay.

All employees will have to be placed in order of pay from the lowest to highest and divided into four equal groups.

The numbers of women and men in each quartile must be provided, but there is no obligation to state the actual pay ranges or grades.

Prospect legal officer Marion Scovell said: “The regulations will do little to solve equal pay problems. Overall figures are helpful for comparing pay gaps across companies and organisations, but do not identify the real inequalities inherent in gender pay.

“Employers should be required to present the differences in pay by pay band or job to get a more accurate picture of any inequality.

“The new regulations may demonstrate problems with promotion and recruitment to high grades – but they will not demonstrate inequality where women and men are doing equal work and will be of little help in fighting equal pay claims.”

Snapshot date and publishing the information

The ‘snapshot date’ is 5 April each year and the data must be published within 12 months. The first gender pay gap reports must therefore be published by 4 April 2018 at the latest.

The information must be published on the employer’s website each year and kept there for three years. There will also be a public list of company reports on a designated government website.

Enforcement

Prospect says it is also extremely disappointing that the regulations have no proper enforcement provisions.

The Equality Act included regulations to make non-compliance an offence and the ability to impose fines, but the government has chosen not to provide any penalties in the new rules.

Some lawyers say that there will be little that can be done with employers who decide not to comply.