What is the Gender Pay Gap?
Simply put, the gender pay gap is the difference between the average earnings of men and women.
Historically there has been a disparity between pay for men and women which, based on recent figures, still shows a difference of 19.2 % in favour of men. For decades the UK has reported on the gender pay gap, however the imbalance is still significant.
In order to encourage organisations to take steps to close this gap, the Government has introduced a requirement for employers to report on the gender pay gap within their business.
What do I need to do?
If you are a company with an employee headcount of 250 or more on April 5th 2017 (and/or in subsequent years) then you will need to comply with the Government’s requirements to report on your Gender Pay Gap. If you have fewer than 250 employees on this date there is no requirement for you to comply with the regulations. However, you should give serious consideration to the business benefits of reporting your gender pay gap, and this will be actively encouraged by the Government and organisations campaigning for equality.
Public authorities in England will also be required to report, largely along the same lines as private sector employers, with the key differences being:
- The snapshot date will be 30 March, rather than 5 April;
- This will coincide with an obligation to report every 4 years on their objectives towards achieving equality in the public sector.
Knowledge is a powerful tool, and by reporting on your gender pay gap as an organisation you will be able to identify and put measures in place in order to reduce any identified gap. It is also a valuable tool for assessing levels of equality in the workplace and the different areas of the business where you can identify female and male participation.
Contact us to find out how Outset can help.
What needs to be calculated?
There are 6 results that employers must report on:
- the difference between the mean hourly rate of pay of male full-pay relevant employees and that of female full-pay relevant employees*;
- the difference between the median hourly rate of pay of male full-pay relevant employees and that of female full-pay relevant employees*;
- the difference between the mean bonus pay paid to male relevant employees and that paid to female relevant employees#;
- the difference between the median bonus pay paid to male relevant employees and that paid to female relevant employees#;
- the proportion of male and female relevant employees who were paid bonus pay#; and
- the proportion of male and female full-pay relevant employees in the lower, lower middle, upper middle and upper quartile pay bands*.
*Based on the pay in the pay period that includes the snapshot date of 5th April. The snapshot date is the date that falls within any relevant pay period that includes 5th April (whether payments are weekly, fortnightly, four weekly, monthly or otherwise).
# Based on bonus payments made over the year between 6th April to 5th April.
What if my results show a high pay gap?
Although not a necessity, employers would be well advised to take the opportunity available to provide a narrative to your results.
Having a high pay gap in any one of the results doesn’t necessarily mean that as an employer you are deliberately treating any gender less favourably than another, however producing a narrative will help you explain why there may be a disparity in certain figures, and what action you plan to take to address it. If you don’t take up the option to publish a narrative with your results then those viewing them will make their own judgements.
You will need to produce a gender pay gap report each year and the hope is that each year your efforts to reduce any disparity will show a reduction in your gender pay gap.
What do I do with my results?
Your results must be confirmed in a written statement by the appropriate person, such as the chief executive, then published on your company’s website as well as the designated Government hosted website.
Where do I start?
At Outset we have deciphered the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 and relevant Acas guidance for you. We’ve developed the Outset Pay Gap Reporter which crunches the numbers and provides you with a usable summary of your results.
All that is required of you is to insert the relevant pay data onto a spreadsheet pro forma by following our simple guidance. Once we have this information from you we will be able to produce your results and help you write the narrative to accompany those results.
GET IN TOUCH now to find out more about your gender pay gap reporting obligations – not only can we help you through the quagmire of gender pay gap reporting, but if you need it, we can help you in exploring ways of reducing any disparity in your organisation using a variety of HR strategies.