Gender Pay Reporting – draft guidance published
ACAS and the Government Equalities Office have now published joint draft guidance on The Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 (the Regulations) due to come into force on 6 April this year.
The Guidance, 'Managing gender pay reporting in the private and voluntary sector' attempts to clarify a number of issues on which employers might have questions or which the draft Regulations (currently subject to Parliamentary approval) do not make clear. Please see our previous article for details on the final draft of the Regulations which were published in December.
For example, the draft guidance addresses grey areas such as those employed under a contract personally to do work (and when the employer is entitled to use the exemption that it is 'not reasonably practicable' to obtain the data needed to carry out the calculations) and employees who work abroad but may still count for the purposes of reporting. It considers various elements of pay where employers may have been unclear such as how pensions, salary sacrifice arrangements and benefits in kind are treated. Practical examples of what is and is not a "full-pay relevant employee" are set out as well as how to determine weekly working hours. However the draft Guidance also contains a few errors where it does not appear to match the wording of the Regulations. It is to be hoped that these will be ironed out before the final Guidance is published.
The Guidance recommends allowing employees to confirm or update their gender without singling them out and questioning them about it. ACAS have produced a draft letter to send to employees explaining gender pay gap reporting to them, which addresses this point.
Whilst the Guidance is relatively easy to follow and gives some step-by-step guidance on how to approach the various calculations, it also has significant sections devoted to encouraging employers to comply fully with the Regulations in good time and to take further action. In support of this it cites statistics of a survey of over 1000 employees, where 93% wanted to see their employer's pay gap, and 92% would use this information if looking for a job and deciding between two employers.
In addition to the legal requirements, for example, it encourages employers to add a supporting narrative and also states that employers should use the gender pay gap information to help understand any underlying causes for their gender pay gap and take suitable steps to minimise it. Both of these are recommendations for best practice, on which employers should take legal advice, rather than requirements of the Regulations. The Guidance suggests that such steps might include implementing support for female employees with children, helping them with career progression through mentoring and development initiatives; or perhaps aiding balanced recruitment by providing work experience opportunities and support for disadvantaged students.
The Guidance also sets out what other considerations (not covered by the Regulations) are needed to reduce the gender pay gap, for example:
- Holding and monitoring evidence about gender in all aspects of employment including recruitment, starting salaries, pay bands and other reward components, promotions, returns from family leave, and data on employees leaving;
- Ensuring policies and practices related to these aspects are up to date;
- Training and supporting line managers, especially in recruitment, promotion and flexible working;
- Managing family-friendly leave successfully;
- Making the most of flexible working;
- Encouraging and reviewing career and talent development;
- Minimising negative impact from pay systems (e.g. promoting the transparency, communication and review of all aspects of pay); and
- Considering lawful positive action under the Equality Act 2010.
The Guidance states that the information required under the Regulations must be published where it can be reasonably expected to be found on the employer's own website. The Government website, on which the information must also be published, will be made known closer to the date of the first snapshot (5 April 2017). Although employers have 1 year from the snapshot date to publish it, the Guidance recommends that employers should aim to publish it "as soon after April as is reasonable for them to do".
How we can help
Blake Morgan has put together a specialist Equal Pay Audit team combining employment lawyers with our HR Consultancy team and benefitting from significant legal and practical experience. We can assist you in carrying out gender pay audits or general equal pay audits, whether to comply with your statutory duties, to protect you from claims or simply to ensure you are adhering to best practice as a responsible employer: please see our Equal Pay Audit flyer.