As an employer, you might be paying a different average hourly rate to men and women within your organisation.
Some employers are required by law to report their gender pay gap every year.
Failure to comply with the regulations may result in government enforcement action and reputational damage.
In this guide, we'll explain what a gender pay gap is, the regulations around it, and how managers should manage gender pay gap reporting in organisations.
The gender pay gap is the difference in the average earnings of men and women in organisations.
The gap is calculated using employer payroll data, which is drawn from a specific date each year. This specific date is known as the snapshot date.
Gender pay gap is different to equal pay. The latter is a legal requirement for employers to pay men and women equally if they are performing similar tasks.
UK employers who have 250 or more staff members on their snapshot date must comply with gender pay gap reporting regulations.
This means that they must publish their company's gender pay gap data on their public-facing website every year.
There are various reasons why employers should measure and report their gender pay gap information on an annual basis. Some of these reasons are:
The following are the penalties for failing to report gender pay gap information on time and the benefits of early reporting:
Failure to report on time or accurately puts organisations in breach of the regulations. This exposes them to the risk of an enforcement action, which may result in court orders and fines.
The government will also publish the names of organisations that failed to report. As well as information on any investigation or enforcement action taken against them.
The gender pay gap service also applies 'late badges' to employers registered within the service.
There are several benefits to reporting the gender pay gap as soon as possible after the snapshot date. These include:
Any person with a contractual employment, on the snapshot date, must be counted in the report. For example:
You should note that employees are counted individually instead of as full-time equivalents. More description is provided below:
If you use job-share arrangements, every employee in a job-share counts as one employee. For example, if two people share a job, they count as two employees in your headcount.
When an employee has multiple jobs with your company, you can count them as one employee or according to how many employment contracts they have.
Agency workers must be excluded from your headcount and gender pay gap calculations. They will be counted as the workforce of the agency that provides them.
Any individual who works for a service company would be included in the headcount of the service company, not the end user.
When forming your headcount and calculating the gender pay gap, you must include employees on leave, such as sick leave or maternity leave, who are receiving full pay.
If any of them is on reduced pay because of their leave, they will no longer be considered full-pay relevant employees. They must still be counted in your headcount and bonus pay gap calculations.
If you hire a self-employed individual under a contract to personally work for you, they must be counted in your headcount and gender pay gap calculations.
If you have the required data, they should also be included in your gender pay gap calculations. Data examples include project initiation paperwork and a schedule of fees.
If you don't have the data, you should think about whether it's reasonably practicable to ask the employed person to provide it for you.
The decision to include or exclude partners from the gender gap calculation and headcount depends on the type of partnership you have with them:
Exclude these partners when calculating your headcount and gender pay gap.
Include these partners when calculating your headcount, but exclude them from your gender pay gap calculations.
For apprentices, seasonal, temporary or casual workers, and zero-hours workers, you need to refer to their contract.
The type of contract these workers are under will dictate whether or not you should include them in your headcount and calculations.
They must be included in your headcount and calculations if they are your employees on the snapshot date. You must include them even if they only worked for you for one day before your snapshot date.
The regulations don't define the terms "men" and "women". The requirement for reporting your pay gaps shouldn't result in any of your staff members being singled out and questioned about their gender.
To reduce the risk of singling out and asking workers about their gender, you should:
Gender pay gap information includes six figures that you must calculate, report and publish. These are:
Private, voluntary sector employers, and all other public authority employers must submit and publish a written statement in addition to reporting their gender pay gap figures.
Public authority employers are not required to submit a written statement, except in cases where they are not included in Schedule 19 to the Equality Act 2010.
This statement, which must be signed by an appropriate person, must confirm the accuracy of the information that has been published.
By adding a supporting narrative to your gender pay gap report, you help anyone reading the report understand your view of why gender pay gaps are present. You can also mention what you've already done to analyse and close the gaps.
The narrative report can include the following:
You must use the government’s gender pay gap service for reporting your figures.
Private, voluntary sector employers, and all other public authority employers must use the same service to submit their written statement if they need to.
You must also publish your gender pay gap report and written statement in a notable place on your public facing website.
You may also publish a supporting narrative and an action plan to clarify gender pay gaps in your organisation, although this is discretionary.
There are two deadlines, each with its own snapshot date.
Most public authority employers are required to use a snapshot date of 31st March. They must report and publish their gender pay gap report by 30th March of the following year.
Private, voluntary sector employers, and all other public authority employers must use the 5th of April as their snapshot date. This means that they have till 4th of April of the following year to report and publish their gender pay gap report and written statement.
An effective gender pay gap action plan will help you understand the pay gaps in your organisation and demonstrate your commitment to closing them.
Ideally, a good action plan would include the following steps:
The gender pay gap reporting regulations were introduced to make it a legal requirement for employers to take action to report any gender pay gaps within their organisation.
Failure to report puts organisations in breach of the regulations which could result in court orders and fines.
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Peninsula Group, HR and Health & Safety Experts
(Last updated )
Peninsula Group, HR and Health & Safety Experts
(Last updated )
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