Legislation was brought in, affective since 2018, requiring all businesses with 250 or more employees on the ‘snapshot date’ (31 March the preceding year for organisations in the public sector and 5 April of the preceding year for private sector employers) to undertake an analysis of the ‘gender pay gap’ within their organisation, compile a report of the data and a written statement confirming its accuracy, submit this to the government and publish it on their public facing website. As your client had 350+ employees on 31 March 2021, they will be required to complete a report this year.
There is also the option to voluntarily include a written narrative of why there is a gap within their organisation, and what action has been taken to resolve it. Employers falling within these requirements must do this yearly on 30 March (public sector) or 4 April (private sector) using data from the snapshot date the year before.
Employers must use the following calculations to compile their report:
• the difference between the mean hourly rate of pay for male and female employees
• the difference between the median hourly rate of pay for male and female employees
• the difference between the mean bonus pay paid to male and female employees
• the difference between the median bonus pay paid to male and female employees
• the proportions of male and female employees who were paid bonus pay
• the proportions of male and female employees who were in the lower, lower middle, upper middle and upper salary quartile bands based on hourly rates of pay
• who in the organisation is responsible for reporting the data.
The benefit of undertaking this analysis is that it enables the employer to evaluate the number of under-represented employees and take steps to resolve this. Undertaking this exercise in a clear and transparent way, and implementing steps towards removing the gender pay gap, can also be used by employers in their advertising and recruitment campaigns, increasing their reputation as a fair and inclusive employer.
For the above reasons, employers not falling within the scope of the regulations may nonetheless choose to undertake their own gender pay gap reporting, either following the same or simplified calculations as for larger organisations. There is also serious consideration being given to introducing similar requirements for ethnicity pay gap reporting (this is not currently legally required) and employers looking to increase their inclusivity and diversity may want to explore this further.
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