Gender pay update
Employers with 250 or more 'relevant employees' are still eagerly awaiting the final version of The Equality Act 2010 (Gender Pay Gap Information) Regulations 2016 and their implementation, requiring such employers to publish information on gender pay. The regulations were originally due to be brought into force on 1 October this year but there is still no sign of the final regulations or the outcome of the Government consultation on them.
The latest indications from the Government Equalities Office suggest that final regulations will be laid before Parliament in the Autumn and brought into force early next year. The relevant 'snapshot' date is still likely to be in April 2017 (although the exact date could be changed – see below) so employers should still prepare on the basis that the first reports will be due in April 2018. However, in August the Government published a separate consultation on gender pay reporting in the public sector which gives a number of indications as to how the final version of the private/voluntary sector regulations are likely to be tweaked. The Government has stated that the two sets of regulations will mirror each other as closely as possible. (Note that the public sector consultation only applies to England – see further below for the position in Wales.)
At the same time, two reports were published from the Institute of Fiscal Studies, and the Chartered Management Institute along with XpertHR, highlighting the persistent gender gap in pay, bonuses and career progression – see our previous article on their findings.
Anticipated tweaks to the private sector regulations
The requirements for the private/voluntary sector are likely to be amended to be in line with the public sector requirements, and the public sector consultation clarifies the following points:
- 'Relevant employee' will rely on the definition of 'employment' under the Equality Act 2010 – in other words, it is wider than 'employees' in the usual sense of the word, and includes those under a contract personally to do work. It could include LLP members and potentially even some 'self-employed' contractors if they are contracted personally to do the work within the meaning of the Equality Act 2010, but should not include the genuinely self-employed or volunteers.
- The 'snapshot date' for the information for public sector bodies will be 5 April. There is a general view that the private/voluntary sector "snapshot date" of 30 April may well be changed to 5 April to bring the two sets of regulations into line with each other. This would also mean publication becomes due by 4 April 2018 and annually thereafter.
- 'Pay', which in the private/voluntary sector draft regulations is said to include maternity pay, is now stated to include paid maternity, paternity, adoption or parental leave "except where an employee is paid less than usual because of being on leave". This is a sensible amendment because to include, for example, statutory maternity pay instead of a woman's normal pay is likely to make her appear less well paid than she is. However, the consultation does not answer the question as to what happens to such employees – should their normal pay be used or are they left out of the reporting all together?
- In the draft private/voluntary sector regulations, only mean bonus pay was included. In the public sector consultation, the Government states that employers will need to publish the difference between the mean and median bonus payments they pay to men and women.
- The publication of 'quartile pay bands', which created much discussion among lawyers, is to be achieved by dividing the workforce into four equal sized groups rather than dividing the overall pay distribution/salary range into equal proportions.
The Government has stated that it will produce further guidance and it is also understood to be working on guidance for the private/voluntary sector.
The reporting will be introduced for public sector bodies in England by amending the Equality Act 2010 (Specific Duties) Regulations 2011 which underpin the existing Public Sector Equality Duty. The amended regulations are to be produced by the end of 2016 and commenced as soon as possible afterwards subject to Parliamentary approval. They will not replace the existing duties for public sector bodies with 150 or more employees to publish certain information, but will be an additional requirement for English public sector bodies with 250 or more employees.
Application to the public sector in Wales
It is important to note that the consultation paper on public sector gender pay gap reporting and the subsequent Regulations apply only to public authorities in England.
In Wales, the public sector general equality duty which came into force on 5 April 2011 is supplemented by a number of specific equality duties which came into force on 6 April 2011. The specific equality duties cover a range of topics, and relevant in the context of gender pay are the specific equality duties covering employment information and pay differences.
In terms of employment information, a listed body in Wales must collect and publish on an annual basis the number of people employed on 31 March each year by protected characteristic. In relation to men and women employed, the information is to be broken down by job, grade (where there is a grading system), pay, contract type and working pattern. This information shows how jobs are distributed and at what level.
In relation to gender pay differences, a listed body in Wales must publish an equality objective in relation to addressing any gender pay difference identified or publish reasons why it has not done so. It must also publish an action plan setting out any policy it has that relates to the need to address the causes of any gender pay difference and any gender pay equality objective it has identified. The action plan must also include a statement about the steps taken (or intended) to fulfil the gender pay objective by the listed body and how long it expects to take.
The Equalities and Human Rights Commission in Wales has published guidance on these specific equality duties.
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.